Natural Gas and Oil Forecast: WTI and Brent Rebound Faces $62–$64 Ceiling Test
News Summary
Oil and natural gas prices have fallen for a third consecutive month, as robust global supply growth and a strong U.S. dollar have outweighed the impact of geopolitical tensions. Weak manufacturing data from China, coupled with record U.S. output of 13.6 million barrels per day and OPEC+ members increasing combined production by over 2.7 million bpd, are collectively pressuring prices. Technically, Natural Gas has shown bullish momentum after breaking above $4.07, targeting $4.24 and $4.37 next. Both the 50-EMA and 200-EMA are trending upward, though the RSI is approaching overbought territory. WTI crude oil is trading near $60.12, capped by a descending trendline around $62.50, while Brent crude consolidates near $63.98, trapped between its 50-EMA and 200-EMA. Both crudes show neutral RSI momentum, with the market awaiting a clear breakout trigger.
Background
The global energy markets in 2025 continue to navigate a complex interplay of supply and demand dynamics. Despite persistent geopolitical tensions, robust growth in global crude oil and natural gas supply, notably from record U.S. output and increased production by OPEC+ members, has emerged as a dominant factor shaping market sentiment. Furthermore, weak manufacturing data from China, a leading indicator for global demand, has amplified concerns about consumption. Concurrently, a strengthening U.S. dollar makes dollar-denominated commodities more expensive for non-dollar buyers, adding downward pressure on prices. These macroeconomic and supply-side factors collectively define the current consolidation phase for oil and gas prices.
In-Depth AI Insights
Why are oil prices struggling despite ongoing global geopolitical tensions, and what does this imply about market fundamentals? - The article states that global supply growth and a firm U.S. dollar have outweighed geopolitical tensions. This suggests that the market is currently more reactive to actual supply-demand imbalances than to the pricing in of potential risks. - Record U.S. output (13.6 million bpd) and OPEC+ members raising production by over 2.7 million bpd indicate an extremely well-supplied market. Even with geopolitical friction, as long as crude can efficiently reach the market, the pressure from oversupply will persist. - Market fundamentals imply that without a material supply disruption or significant demand recovery, price upside will face strong resistance, pointing to an unexpected resilience on the supply side. How might the U.S. administration's energy policy under President Donald J. Trump influence sustained global supply growth and market stability? - The Trump administration has consistently advocated for 'energy dominance' and maximizing domestic oil and gas production. This signals continued support for fracking and drilling activities, sustaining high levels of U.S. crude output. - High U.S. production acts as a 'safety valve' for global supply, providing a continuous counterweight to OPEC+. This could force OPEC+ to face greater pressure for deeper cuts to support prices in the future, potentially at the expense of their market share. - This policy stance contributes to robust global supply, reducing the risk of extreme price volatility due to shortages, thereby fostering relative market stability, though challenging for oil-producing nations seeking higher prices. What are the key risks to the current price consolidation for WTI and Brent, and what triggers could lead to a breakout? - Key Risks: - Further demand weakness: Continued deterioration in manufacturing data from China or other major economies, or a greater-than-expected global economic slowdown, could further depress crude demand. - Persistent oversupply: If OPEC+ fails to effectively coordinate deeper cuts, or if non-OPEC production continues to climb, the market will remain under pressure. - Sustained U.S. dollar strength: If the Federal Reserve continues its tightening cycle or global risk aversion drives up the dollar, it will further weigh on oil prices. - Breakout Triggers: - Unexpected major supply disruptions: Such as escalating geopolitical conflicts in the Middle East leading to damage to key producing facilities or blockades of critical shipping lanes. - An unexpectedly strong global economic recovery: Especially a significant rebound in China's economy, which would substantially boost demand expectations. - OPEC+ implementing deeper, market-surprising production cuts to forcefully rebalance supply and demand.