Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Tests New Lows As Trump Says He Prefers To Avoid Escalation

WTI oil tests new lows as President Trump said that he preferred to avoid escalation in the Middle East. He added that U.S. had a “very strong position” in negotiations.

Recent reports indicated that Iran and Oman discussed the potential restart of navigation in the Strait of Hormuz. The freedom of navigation in the Strait is required to restart comprehensive negotiations with the U.S., which will involve Iran’s nuclear program and other important points.

It should be noted that U.S. and Iran did not attack each other for four days, which indicates that both sides are focused on reaching a temporary deal. Traders believe that traffic will be restored quickly when the Strait of Hormuz is reopened.

OPEC+ has recently indicated that it would pause production hikes after an increase in September. The group is trying to evaluate the impact of Iran war and UAE’s exit from OPEC. At this point, OPEC+ policy does not have a material impact on market dynamics as traders focus on physical flows of oil through the Strait of Hormuz.

Currently, WTI oil is trying to settle below the support level at $78.00 – $78.50. In case this attempt is successful, WTI oil will head towards the next support, which is located in the $73.50 – $74.00 range. RSI remains in the moderate territory, so there is plenty of room to gain downside momentum in case the right catalysts emerge.

On the upside, WTI oil needs to settle back above the resistance at $81.50 – $82.00 to have a chance to gain sustainable upside momentum in the near term.