Natural Gas and Oil Forecast: Hormuz Risk Supports WTI and Brent as Gas Tests Key Resistance

What to Know

• Uncertainty around Strait of Hormuz traffic remains a major oil supply risk after the temporary ceasefire ended on August 17.
• Conflicting positions from the U.S. and Iran have left traders without a clear view on whether Gulf shipping has fully normalized.
• Alternative export routes and shifting tanker behavior show that producers and buyers are adapting to constrained Gulf and Red Sea shipping lanes.
• The EIA estimates Middle East disruptions likely accounted for 5.5 million barrels per day of shut-ins in July, with about 600,000 barrels per day expected to remain shut in for the rest of 2020.
• EIA data showed total commercial crude inventories falling by about 600,000 barrels in the week ending August 14.
• WTI is trading at $84.62 on the 4-hour chart and remains technically constructive above $83.79, with $86.87 the next key resistance level.
• Brent is trading at $91.55 on the 4-hour chart and remains above $90.17, keeping $93.78 and $97.30 in focus for buyers.
• Natural gas has rebounded from the $2.62 to $2.67 support zone and is testing the $2.78 to $2.80 resistance area.
• Lower 48 natural gas production averaged around 108.5 Bcf/d in August, leaving the domestic market comfortably supplied.

Hormuz Uncertainty Keeps Oil Risk Premium Alive

Oil markets remain focused on the Strait of Hormuz as traders assess whether Gulf export flows can normalize after the end of the temporary ceasefire on August 17. The waterway remains central to global crude and liquefied natural gas trade, so even partial restrictions can have an outsized effect on risk pricing, freight decisions, and near-term supply expectations.

The latest market tension comes from conflicting interpretations of whether the route is fully open. President Trump has argued that there are no ongoing negotiations with Iran and that Hormuz is open. Iran, however, has continued to maintain that restrictions remain in place. That gap has left energy traders dealing with a market where the legal, diplomatic, and operational picture is still unclear.

For crude benchmarks, the uncertainty has helped keep WTI and Brent supported even as traders also monitor inventory data and technical resistance levels. The absence of a clear diplomatic path for restoring Gulf exports means supply risk has not fully disappeared from pricing. While the market has moved beyond the initial shock phase, the threat of disruption remains an active consideration for refiners, shippers, and financial traders.

Export Routes and Tanker Patterns Show Market Adaptation

Energy markets are not standing still while uncertainty persists. Producers and buyers are adjusting shipping patterns, using alternative loading points, and reassessing routes through high-risk corridors. Iraq has developed new mechanisms for exports at alternative locations beginning in September, a sign that regional producers are preparing for a more complicated logistics environment if Gulf constraints remain in place.

At the same time, two large Chinese shipping companies are not sending tankers to Hormuz or Bab al-Mandeb and are instead loading cargoes outside the Gulf. That shift illustrates how buyers may reduce exposure to contested shipping lanes when insurance, security, or operational risks rise. These adaptations can soften the immediate impact of disruptions, but they can also raise costs, lengthen delivery times, and increase the complexity of global crude movements.

The EIA estimates that Middle East disruptions likely accounted for 5.5 million barrels per day of shut-ins in July. It also expects about 600,000 barrels per day to remain shut in for the rest of 2020. Those figures remain central to the supply debate because they indicate that some barrels may not quickly return even if conditions stabilize. For traders, the key issue is whether lost supply remains manageable or begins tightening the market more aggressively.

U.S. Crude Inventories Ease Slightly

U.S. inventory data has added another supportive element for crude. Compared with API figures, EIA data showed total commercial crude inventories falling by about 600,000 barrels in the week ending August 14. The decline was not large enough on its own to dramatically reshape the market, but it helped reinforce the idea that crude balances are not weakening sharply despite ongoing uncertainty.

Inventory changes matter because they can confirm or challenge the market’s broader supply narrative. When geopolitical risk is high, a draw in commercial crude stocks can make buyers more willing to defend support levels. Conversely, a large build would usually reduce the urgency behind risk-driven buying. The latest draw therefore fits with a market that is still watching Hormuz closely while also responding to domestic stock trends.

WTI Technical Outlook: Buyers Defend Key Support

WTI is trading at $84.62 on the 4-hour chart, holding well above the 50-EMA at $82.41 and the 100-EMA at $81.64. The benchmark has recovered from its August lows and is consolidating just above the $83.79 support level. That area is important because it currently separates a constructive short-term structure from a weaker consolidation pattern.

Technical traders are watching $86.87 as the next major resistance level. A clean break above that area would likely strengthen the bullish case and could bring $90.56 into focus. Above that, $93.58 remains another resistance level for market participants tracking the upside sequence. The current structure suggests buyers still have control while price remains above $83.79, but momentum has slowed after the latest push higher.

The RSI is sitting at 58 and has crossed back above the midline, indicating positive bullish momentum without suggesting that the market is stretched into extreme conditions. If WTI loses $83.79, traders may look toward $80.90 as the next important support level. A break below $80.90 would weaken the bullish structure and could extend the current consolidation range.

Brent Technical Outlook: Bulls Hold the Upper Hand

Brent crude is trading at $91.55 on the 4-hour chart after extending its recovery from the $78.00 trading level. The market remains above the 50-EMA at $88.42 and the 100-EMA at $87.15, reinforcing a constructive short-term trend. Recent candles have consolidated above $90.17, suggesting buyers are attempting to form a base before challenging higher resistance levels.

The first key resistance for Brent is $93.78. A move through that level would strengthen the bullish outlook and could open the way toward $97.30. Beyond that, $102.02 stands as the next resistance level watched by technical traders. On the downside, the first support remains $90.17, followed by $86.67 and $83.30.

The RSI is at 63, showing solid bullish momentum while remaining below overbought territory. As long as Brent holds above $90.17, the near-term technical structure remains constructive. However, a fall below $86.67 would damage that structure and suggest that the recent rally has lost important support.

Natural Gas Rebounds Into a Critical Resistance Zone

Natural gas has moved back up to $2.78 after rebounding from the $2.62 to $2.67 support zone. Price has climbed above the 50-EMA at $2.74 and is now testing the 100-EMA at $2.77. It is also pressing against a descending trendline that has limited rallies during the recent move lower, making the $2.78 to $2.80 area a key decision zone for short-term traders.

If natural gas breaks above $2.80, some chart watchers would likely view the move as a short-term bullish signal. That could expose resistance at $2.86 and $2.92, with $2.98 also standing above as another potential barrier. The RSI is roughly 61, improving but not overbought, which leaves room for buyers to attempt a breakout if momentum continues.

If the trendline resistance holds, however, natural gas may slide back toward $2.73 or $2.67. The $2.62 level remains another support zone to monitor if selling pressure returns. The technical picture has improved, but the market still needs a decisive move through resistance before a stronger bullish case can develop.

U.S. Natural Gas Supply Remains Comfortable

The domestic natural gas backdrop remains very different from the crude oil market. While oil is sensitive to Gulf export uncertainty, U.S. natural gas supply remains ample. Lower 48 production in August averaged around 108.5 Bcf/d, rising from July’s record. That strong production base has helped keep the domestic market well supplied even as demand from LNG feedgas recovers from recent maintenance.

Inventories are also much higher than normal, providing an additional buffer against supply concerns. Healthy storage levels and above-average production reduce the risk of a near-term domestic shortage. That does not eliminate price volatility, particularly when technical levels are in play, but it does mean that rallies may need confirmation from stronger demand or a clearer breakout pattern.

For now, the energy complex remains divided. Crude oil continues to reflect geopolitical and shipping uncertainty, while U.S. natural gas is shaped more by domestic supply comfort and technical resistance. That contrast may keep WTI and Brent supported by risk premiums, while natural gas requires a breakout above $2.80 to shift sentiment more decisively in favor of buyers.

Frequently Asked Questions (FAQs)

Why is the Strait of Hormuz important for oil prices?

The Strait of Hormuz is a critical shipping route for Gulf energy exports. When traders are uncertain about whether traffic is fully open, they may price in additional supply risk, which can support crude benchmarks such as WTI and Brent.

What changed after the ceasefire ended?

The temporary ceasefire ended on August 17, leaving no clear diplomatic path for restoring Gulf exports. That uncertainty has kept the market focused on shipping restrictions, alternative export routes, and tanker movements.

What are the key WTI levels to watch?

WTI is trading at $84.62 on the 4-hour chart. Technical traders are watching $83.79 as support and $86.87 as immediate resistance, with $90.56 and $93.58 above that if buyers extend the move.

What are the key Brent levels to watch?

Brent is trading at $91.55 on the 4-hour chart. The first support is $90.17, while resistance sits at $93.78, followed by $97.30 and $102.02 if bullish momentum continues.

Is natural gas turning bullish?

Natural gas has improved technically after rebounding from the $2.62 to $2.67 support zone, but traders are watching the $2.78 to $2.80 area closely. A break above $2.80 could strengthen the short-term bullish view.

Why is U.S. natural gas supply considered comfortable?

Lower 48 production averaged around 108.5 Bcf/d in August, and inventories are much higher than normal. Those conditions provide a significant buffer even as LNG feedgas demand recovers from recent maintenance.

What did the latest U.S. crude inventory data show?

EIA data showed total commercial crude inventories falling by about 600,000 barrels in the week ending August 14. The draw added modest support to crude prices alongside ongoing geopolitical risk.

Could Brent move toward $97.30?

A move above $93.78 would strengthen the bullish case for Brent and could bring $97.30 into focus. However, a fall below $86.67 would weaken the current bullish structure.

Could WTI reach $90.56?

WTI may test $90.56 if it breaks above the $86.87 resistance level. The bullish structure remains more convincing while price holds above $83.79.

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