What to Know
- A drone targeting Saudi Arabia’s Shaybah oilfield was intercepted, while falling debris killed two people, according to the Saudi energy ministry.
- A separate attack on Dammam’s King Fahd International Airport killed one person and injured eight.
- The State Department ordered non-emergency US government staff and their families to leave Saudi Arabia, citing escalating Houthi attacks on airports and critical infrastructure.
- Middle East oil exports excluding Iran have risen above 24mn barrels a day, up from 23.3mn before the war, according to Kpler.
- The EIA said US commercial crude stocks fell 3.06mn barrels to 412.5mn in the week to October 16, compared with an 820,000-barrel draw forecast in a Reuters poll.
- Gasoline inventories dropped 2.95mn barrels, while distillates rose 1.68mn barrels but remained 9% below the five-year average.
- WTI is trading near $98.49, with traders watching $99.59 as first resistance and $97.47 as key nearby support.
- Brent is trading near $110.55, with $111.98 in focus as first resistance and $108.03 as a key support area.
- Natural gas is trading near $2.75/MMBtu after breaking below its rising channel, with the $2.63 to $2.68 support zone now in focus.
Saudi Security Risks Keep Crude Markets Alert
Crude oil markets remain on edge as security risks around Saudi energy and transport infrastructure continue to shape the near-term outlook for Brent and WTI. A drone targeting Saudi Arabia’s Shaybah oilfield was intercepted, but falling debris killed two people, the Saudi energy ministry said. In a separate incident, an attack on Dammam’s King Fahd International Airport killed one person and injured eight, adding to concerns that regional tensions could threaten critical infrastructure and transport flows.
The escalation was serious enough for the State Department to order non-emergency US government staff and their families to leave Saudi Arabia, citing rising Houthi attacks on airports and critical infrastructure. For oil traders, this does not automatically translate into lost barrels, but it increases the risk premium attached to crude pricing. Markets tend to react strongly when supply routes, export facilities, or large producing regions face disruption risk, even when physical flows continue to adapt.
That adaptation is already visible. Middle East oil exports excluding Iran have risen above 24mn barrels a day, up from 23.3mn before the war, according to Kpler. Saudi Arabia and the UAE have been routing more crude through pipelines that bypass the Strait of Hormuz. This matters because the market is not only pricing the immediate risk of attacks, but also the resilience of regional logistics. If exporters can maintain or increase shipments despite elevated security threats, the risk premium may be contained. If attacks intensify or disrupt key assets, that premium could widen quickly.
US Crude Draw Adds Support to WTI
WTI received additional support from another decline in US commercial crude inventories. The EIA said commercial crude stocks fell 3.06mn barrels to 412.5mn in the week to October 16. That was a larger decline than the 820,000-barrel draw forecast in a Reuters poll, reinforcing the view that the US crude balance remains relatively tight in the near term.
Product inventories gave a more mixed signal. Gasoline stocks dropped 2.95mn barrels, which can point to firmer demand or tighter refining balances. Distillates rose 1.68mn barrels, although inventories remain 9% below the five-year average, keeping that part of the market sensitive to demand shifts and supply interruptions. Crude stocks at the Cushing hub increased by 987,000 barrels, a detail that may temper some of the bullish interpretation of the nationwide draw because Cushing is closely watched as a physical delivery point for WTI.
For technical traders, the inventory data lands at an important moment. WTI is trading near $98.49 on the 2-hour chart and remains within reach of resistance at $99.59. The market has struggled to hold gains above that level over the past week, so a decisive break would be viewed as a stronger confirmation that buyers are still in control. Until then, WTI may remain caught between supportive fundamentals and the need for a clean technical breakout.
WTI Technical Outlook: $99.59 Is the Breakout Line
WTI’s short-term chart continues to show a constructive structure while price holds above the $97.47 to $98.00 support zone. Buyers stepped in again after a brief dip toward $96.30, keeping the rising trendline from the early-October low intact. Price is back above the faster moving average, and both moving averages continue to slope higher, which keeps the broader uptrend in place for now.
The first resistance is $99.59. A clean break above that level would expose $101.20, followed by $102.49. Those levels are important because they mark the next areas where momentum traders may look for continuation, while short-term sellers may attempt to defend gains. On the downside, $97.47 and the faster moving average form the first support area, with the rising trendline just below. A break there would open the way toward $95.31 and then $93.54.
Momentum is improving but not yet stretched. RSI is around 52 and has just crossed above its signal line near 50, suggesting that buying pressure is recovering while still remaining balanced. The near-term bias is slightly bullish while WTI holds above $97.47. A sustained move above $99.59 would strengthen the uptrend, while a close below $95.31 would break the trendline structure and shift attention to deeper support.
Brent Outlook: Buyers Defend $108.03
Brent is also showing a firm technical posture. It is trading near $110.55 on the 2-hour chart after buyers defended the rising trendline near $108.03. That level is now the key support marker for chart watchers, especially because the faster moving average is tracking close to the same area and providing another layer of technical support.
The first resistance for Brent is $111.98. A clean break above it would expose $113.47 and then $114.81. Because Brent is more directly tied to international crude pricing and seaborne flows, regional security risk can have an immediate psychological effect on the contract. Still, the chart needs confirmation. A move through $111.98 would suggest that buyers are ready to extend the rally, while failure at that level could keep the market range-bound in the short term.
On the downside, $108.03 and the rising trendline form the key support zone. Below that, traders are watching $106.42 and $104.93, where the slower moving average sits. RSI is near 58 and above its signal line around 54, which points to positive momentum without an overbought reading. The bias remains bullish while Brent holds above $108.03. A sustained break above $111.98 would confirm the next leg higher, while a close below $108.03 would break the trendline and point toward $106.42.
Natural Gas Weakens as Mild Weather Limits Demand
Natural gas is moving in the opposite direction from crude. US gas futures slid to a four-week low on Wednesday as forecasts for mild weather through early November curbed heating demand expectations. In the gas market, weather is often the dominant short-term driver because heating and cooling needs can quickly change consumption patterns across residential, commercial, and power-sector demand.
LSEG expects demand of 108 bcfd next week, below the five-year average of 117 bcfd. At the same time, output has averaged 111.5 bcfd so far in October. That combination of softer expected demand and robust production helps explain why traders have become more cautious. Even when storage cushions are not especially comfortable in some regions, mild weather can reduce urgency and pressure prices lower.
NGI expects today’s EIA report to show an 82 Bcf injection. It also says East region stocks could slip into a deficit against last year after a pipeline leak curtailed Appalachian output in mid-October. That regional detail may prevent the gas market from becoming uniformly bearish, but the national price action currently shows that weather-driven demand concerns are dominating near-term sentiment.
Natural Gas Technical Outlook: Breakdown Puts $2.68 in Focus
Natural gas is trading near $2.75/MMBtu on the daily chart after a sharp breakdown below the rising channel that had guided prices since July. The move followed a double rejection at the $3.32 resistance level, which made the subsequent decline more technically significant. A single large red candle carried price from near $3.00 to below $2.80, signaling a rapid shift in control from buyers to sellers.
The first major support zone is $2.63 to $2.68, where the August lows were formed. A break below that area would expose $2.49, followed by $2.33. On the upside, $2.95 is the first resistance, followed by the former channel floor near $3.02, which now acts as a ceiling. Above that sits $3.32, the level that rejected price twice before the breakdown.
Momentum is clearly weaker. RSI is around 36 and falling well below its signal line near 53, suggesting strong bearish momentum but not yet an oversold condition. The near-term bias remains bearish while natural gas stays below $2.95. A daily close below $2.68 would strengthen the downside case, while a recovery above $2.95 would invalidate the breakdown and suggest sellers have lost control.
Market Takeaway
The energy complex is split between crude strength and natural gas weakness. Brent and WTI are supported by Saudi security risks, adaptive but still closely watched Gulf export routes, and a larger-than-expected US crude inventory draw. Technical structures for both crude benchmarks remain constructive as long as key supports hold, with WTI focused on $99.59 and Brent watching $111.98.
Natural gas faces a different setup. Mild weather forecasts through early November, demand expectations below the five-year average, and strong October output have pushed prices lower. Unless gas can reclaim $2.95, technical traders are likely to keep watching the $2.63 to $2.68 zone as the next major test.
Frequently Asked Questions (FAQs)
Why are oil prices supported despite exports adapting?
Oil prices are supported because security risks around Saudi infrastructure raise the possibility of disruption, even though Middle East oil exports excluding Iran have risen above 24mn barrels a day.
What happened at Saudi Arabia’s Shaybah oilfield?
A drone targeting the Shaybah oilfield was intercepted, but falling debris killed two people, according to the Saudi energy ministry.
Why is $99.59 important for WTI?
$99.59 is the first resistance level for WTI. A clean break above it would expose $101.20 and then $102.49, strengthening the short-term bullish case.
What is the key support level for WTI?
The key nearby support for WTI is $97.47, supported by the faster moving average and the rising trendline just below it.
Why is Brent focused on $111.98?
$111.98 is the first resistance level for Brent. A sustained move above it would expose $113.47 and then $114.81.
What is pressuring natural gas prices?
Natural gas is under pressure because forecasts for mild weather through early November are expected to curb heating demand, while output has averaged 111.5 bcfd so far in October.
What is the next major support zone for natural gas?
The next major natural gas support zone is $2.63 to $2.68, where the August lows were formed.
What would invalidate the bearish natural gas setup?
A recovery above $2.95 would invalidate the breakdown and suggest that sellers have lost near-term control.