Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Tests New Highs As UAE Stops Trade With Iran

• WTI oil tested resistance at $86.00-$86.50 while Brent oil attempted to settle above $92.50, driven by expectations of continued closure of the Strait of Hormuz and rising Middle East tensions
• UAE's decision to stop all trade with Iran after a missile attack is expected to deal a major blow to Iran's economy, though traders anticipate further escalation rather than near-term negotiations
• U.S. crude inventories unexpectedly increased by 4.4 million barrels versus forecasts of a 0.6 million barrel decline, while the Strategic Petroleum Reserve fell from 298.7 to 293.4 million barrels

Market Summary: Energy Markets Rally on Middle East Tensions

Key Developments:

Oil prices surged to new highs following escalating tensions between Iran and the UAE. Iran launched missile attacks on the UAE, which responded by halting all trade and financial transactions with Iran—a move expected to severely impact Iran's economy. Traders are betting the Strait of Hormuz will remain closed in coming weeks, driving continued price pressure.

Price Movements:

• Natural Gas: +3.00%, trading at $2.78, supported by hotter weather forecasts driving demand. Testing resistance at $2.85, with potential to reach the 50-day MA at $2.98.
• WTI Oil: +0.22%, testing the $86.00-$86.50 resistance level with potential to reach $91.00-$91.50. RSI indicates room for additional upside.
• Brent Oil: +0.15%, attempting to settle above $92.50, with resistance at $95.50-$96.00 and potential movement toward $100.00.

Key Data Points:

The latest EIA report showed unexpected crude inventory builds of +4.4 million barrels (vs. -0.6M forecast) and gasoline inventories up +0.7M barrels (vs. -1.2M forecast). Distillate inventories fell -1.5M barrels. U.S. Strategic Petroleum Reserve declined from 298.7M to 293.4M barrels. Domestic production increased slightly to 13.830M bpd.

Market Implications:

Markets expect continued escalation as Iran faces mounting economic pressure from sanctions and naval blockades. Traders anticipate Iran may escalate further to impose costs on the global economy, supporting elevated oil prices. The U.S. continues maximum economic pressure tactics to force Iran back to negotiations.