Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Gains Ground As Drones Attack Oil Fields In Iraq

Natural gas prices pulled back after the EIA reported a 46 Bcf increase in working gas storage. Conversely, crude oil benchmarks gained ground, with WTI oil rising due to reports of drone attacks on Iraqi Kurdistan oil fields, and Brent oil approaching the $70.00 level on increased geopolitical risk premium.

Analysis

The energy markets are exhibiting a clear divergence, with crude oil benchmarks strengthening while natural gas prices retreat. The pullback in natural gas is directly attributed to a bearish Energy Information Administration (EIA) report, which indicated a working gas storage increase of 46 billion cubic feet (Bcf). This supply-side pressure has put the key technical level of $3.50 at risk, with a break below potentially leading to a test of the $3.35 to $3.40 support zone. In contrast, crude oil prices are advancing, driven by heightened geopolitical risk in the Middle East following reports of drone attacks on oil fields in Iraqi Kurdistan. The technical picture for WTI crude is bullish, having settled above its support level of $66.00–$66.50. Similarly, Brent crude is approaching the significant $70.00 mark, with a successful move above this level likely to target the next resistance at $71.00–$71.50.

Key Decisions for Investors

• Given the opposing fundamental drivers, consider a pairs trade by taking a long position in crude oil (e.g., USO, BNO) and a short position in natural gas (e.g., UNG) to capitalize on the divergence between geopolitical risk premium in oil and bearish supply data for gas.
• For oil-focused investors, the drone attacks in Iraqi Kurdistan and WTI's firm position above the $66.00 support level reinforce a bullish short-term outlook; look for Brent to break the $70.00 resistance as a confirmation of further upside momentum.
• Traders should monitor natural gas prices at the critical $3.50 level, as a definitive settlement below this point following the bearish 46 Bcf storage build would signal a continuation of the downtrend towards the $3.35 support.