Extract from Investing .com US perspective.Oil: Price OutlookA...

Extract from Investing .com US perspective.


Oil: Price Outlook

A settlement for WTI next week above the 50-week EMA of $82.60 will bring further strength for U.S. crude that could carry it through the 200-Day Simple Moving Average of $82.90 and the 100-week SMA of $84.80, said SKCharting.com’s Dixit.

“We have a major upside target for WTI on the Monthly Middle Bollinger Band at $87,” adds Dixit.

“On the downside, the 5-Day EMA of $81.90 acts as support, failing which U.S. crude looks set to drop to $80.40 and $79.30.”

“If selling intensifies below the horizontal support zone of $79.30, WTI can come crashing down towards the breakout point to fill the gap left at $75.70, which is our major target on the downside.”

Natural gas: Market Settlements and Activity

Natural gas futures overcame the odds on Friday to rally to a positive weekly close, after five weeks in the red.

But technical charts suggested that without a steady upward trajectory, the front-month gas futures contract on the New York Mercantile Exchange’s Henry Hub could slip back under the key $2 support level.

The hub’s most-active May gas contract did a final post-settlement trade of $2.106 per mmBtu, or million metric British thermal units, after officially closing on Friday at $2.114 — up 10.7 cents, or 5.3%.

For the week, May gas was also up by about 5%, logging its first weekly gain since the week ended Feb. 24, when it settled up 23% at just above $3 per mmBtu.

Despite its positive finish on Friday, the front-month gas contract hit a session low of $1.948 in early trading, signaling that it was still vulnerable to sub-$2 pricing in the coming week.

Friday’s session low in gas came after the U.S. Energy Information Administration, or EIA, reported that gas-in-storage in the United States rose by 25 billion cubic feet, or bcf, last week in the first series of injections for the spring season.

While that build was smaller than the 28-bcf injection forecast by industry analysts, what weighed on market sentiment was the size of gas inventories as a whole.

Last week’s injection took the balance in gas storage to 1.855 trillion cubic feet, or tcf, the EIA said.

That was 33% above the year-ago storage level and nearly 19% higher than the five-year average for gas inventories.

The 2023 pre-summer injection season is starting with one of the most bloated gas storages, courtesy of a winter that ran mostly warm, with some of the fewest snow storms ever.

Typically, this is a time when storage is at seasonal lows after large and consistent withdrawals during winter, when gas is burned for heating.

“Future builds are also expected to be slightly larger than normal due to warmer average temperatures across the US and could put surpluses back above 350 bcf,” Houston-based energy markets advisory Gelber & Associates said in an outlook issued Friday.

Natural gas: Price Outlook

Despite the weak demand situation for gas, price action on the Henry Hub indicates clear momentum accumulation from the horizontal support base formed at $1.94 and was attempting to break above the 5-week EMA of $2.21, said Dixit.

“Going into the week ahead, we’re looking at a potentially bullish structure, which will need affirmation via a weekly break and close above the Daily Middle Bollinger Band of $2.18. If that succeeds, then the 5-week EMA of $2.21 will kick in, followed by the 50-day EMA of $2.57 and the swing high of $3.02.”