Natural Gas and Oil Forecast: WTI Holds Bullish Trend; Can Natural Gas Extend Above $3?

U.S. crude inventories rose by 2 million barrels, but stocks remain well below the five-year seasonal average. Strong gasoline and jet fuel demand continues supporting the oil market despite the surprise inventory build. WTI remains inside a bullish channel, with a sustained move above $88.61 opening the door toward $90.73. Brent continues consolidating near recent highs while buyers target the next major resistance around $99.17. Natural gas confirmed a breakout above range resistance, improving the outlook toward the $3.03 and $3.09 levels.

On the oil side, prices are reacting to the latest U.S. inventory numbers and the persisting geopolitical backdrop. In the seven days through July 17, U.S. commercial crude oil inventory increased by 2 million bbls to 411.7 million bbls, but remained 6% below the five-year seasonal average. U.S. refineries were operating at 96.1% of throughput of 17.1 million bbls/d, while U.S. gasoline demand remained at 8.9 million bbls/d (averaged over the last four weeks), up 1% yr-over-yr. U.S. jet fuel demand climbed 9% yr-over-yr. In the meantime, concerns over continued disruptions to Gulf crude oil flows kept the risk premium alive. This would lead some analysts to estimate a 1.5 million bbls/d oil deficit in 2026, although the supply is expected to recover and a 1.9 million bbls/d surplus is expected to prevail in 2027.

In the natural gas space, the fundamentals are healthy ahead of the latest EIA report on natural gas inventory. The working inventory level was 2,922 Bcf for the week through July 10. The data will be updated on July 23. With LNG export demand and stable power sector demand on the rise, the medium- to long-term demand outlook remains bright for U.S. natural gas.

After experiencing consolidation for the last few sessions, Natural Gas is now moving sideways higher. On the 4H chart, bulls appear to be back in the driver’s seat after some consolidation. NG is currently trading at $2.97, having broken above the previous $2.95 resistance level, though still testing the downward trendline below. However, it remains below $3.00, which is the 100-EMA. The nearest resistance levels are at $3.03, then $3.09, and finally $3.15. NG has now broken above $2.95, which was acting as support on the downside earlier. NG is currently above the $2.93 50-EMA, and the next support level could be near $2.90, with additional support at $2.83. NG is currently above the $2.93 50-EMA. On the RSI indicator, bulls are in control at around 64, and NG looks ready for further gains. The breakout of this choppy range is a bullish move. Once NG moves above $2.95, the likelihood of an upward move is higher, with initial target levels at $3.03, then $3.09, and finally $3.15. NG can correct back to $2.95 if it fails to sustain above that level, or even go down to $2.90 in the short term.

WTI is looking bullish on the 2H chart, currently trading in an uptrend channel after rebounding from the previous $85.87 level. As of this review, USOIL is trading at $88.16. On the technical side, the price is above $84.25, which is the 50-EMA on the 2H chart. The 100-EMA is located at $81.47, further confirming a healthy uptrend. On the RSI, bulls remain in c...