empty
14.05.2025 12:21 AM
Oil Lacks Confidence to Sustain a Rally

This image is no longer relevant

The oil market has come back to life: since the beginning of last week, Brent has gained more than 12%, and this momentum is driven not just by noise but by real events. The key catalyst was the new round of negotiations between the U.S. and China, which resulted in the announcement of a temporary reduction in mutual tariffs. This was a breath of fresh air for market participants tired of chronic trade tensions.

However, the easing of geopolitical pressure on other fronts—between Russia and Ukraine, India and Pakistan—has yet to trigger a strong market reaction. This indicates that players are betting on the trade front, rather than the political one, as the primary driver behind demand recovery.

Further support came from domestic U.S. data. The number of active drilling rigs fell from 483 to 474 over two weeks—a direct signal that producers are unwilling to operate at a loss and that the market is beginning to adapt to previous pricing realities.

Production dropped from 13.46 to 13.37 million barrels per day. Commercial inventories have also moved counter-seasonally, down 2 million and 2.7 million barrels over the past two weeks. These are more than just numbers; they're evidence of resilient demand amid economic uncertainty.

Gas Rally

Natural gas hasn't been left out of the rally. After slumping in the spring, Henry Hub futures broke above the $3.70 per MMBtu level, closing in on the May high of $3.80. A decline in continental U.S. production from 105.8 to 103.7 billion cubic feet per day has supported the market.

Despite a temporary dip in LNG exports to 15.1 Bcf/d due to maintenance at key terminals, the broader outlook remains moderately bullish. Late May temperature forecasts could also boost demand for cooling, albeit modestly.

Technical Outlook for Oil and Gas

Brent's key resistance zone is at $67—formerly a support level lost in April. A breakout and close above this level would open the path toward $71, potentially signaling a complete trend reversal.

This image is no longer relevant

Similarly, for WTI, the key mark is $64, followed by $68. Only a firm close above these levels would confirm a reversal and the end of the corrective phase, with more than 20% growth from May's lows—technically marking the start of a bull market.

Brent's support remains around $62.5, and WTI's at $59. A drop below these could trigger a pullback to April lows.

Natural gas shows similar dynamics. Resistance is at $3.80, with the next target at $4.20. Support lies at $3.50 and $3.35. The RSI technical indicator is nearing overbought territory but does not yet signal a reversal, as long as the price stays above $3.70.

Conclusion

The local momentum is strong, but a confirmed trend reversal requires more conviction, both technically and in the news flow. Natural gas cautiously tests the upside amid reduced supply and light seasonal demand. Bullish bets remain in place, but a confirmed bull trend scenario will require validation within the next one to two weeks.

Natalya Andreeva,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY: Simple Trading Tips for Beginner Traders on June 3. Review of Yesterday's Forex Trades

The test of the 143.05 level occurred when the MACD indicator moved significantly above the zero mark, limiting the pair's upside potential. For this reason

Jakub Novak 08:50 2025-06-03 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on June 3. Review of Yesterday's Forex Trades

The test of the 1.3555 level in the afternoon coincided with when the MACD indicator had already moved significantly upward from the zero mark, limiting the pair's upside potential

Jakub Novak 08:50 2025-06-03 UTC+2

EUR/USD: Simple Trading Tips for Beginner Traders on June 3. Review of Yesterday's Forex Trades

The test at the 1.1438 level coincided with the MACD indicator beginning to move upward from the zero mark, confirming the correct entry point for buying the euro. However, after

Jakub Novak 08:50 2025-06-03 UTC+2

Intraday Strategies for Beginner Traders on June 3

The dollar continues to weaken — especially against the euro. Losses against the pound are somewhat smaller. Yesterday's weak ISM data triggered a wave of selling in the U.S. dollar

Miroslaw Bawulski 07:48 2025-06-03 UTC+2

USD/JPY: Simple Trading Tips for Beginner Traders on June 2nd (U.S. Session)

Trade Review and Tips for Trading the Japanese Yen The price test at 143.07 occurred when the MACD indicator had already moved significantly below the zero line, which limited

Jakub Novak 18:57 2025-06-02 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on June 2 (U.S. Session)

Trade Review and Tips for Trading the British Pound The price test at 1.3528 occurred when the MACD indicator had already moved significantly above the zero line, which limited

Jakub Novak 18:55 2025-06-02 UTC+2

EUR/USD: Simple Trading Tips for Beginner Traders on June 2nd (U.S. Session)

Trade Review and Tips for Trading the Euro The price test at 1.1408 occurred when the MACD indicator had already moved significantly above the zero line, limiting the pair's upward

Jakub Novak 18:52 2025-06-02 UTC+2

USD/JPY: Simple Trading Tips for Beginner Traders on June 2. Review of Yesterday's Forex Trades

The price test at 143.67 occurred when the MACD indicator had already moved significantly below the zero line, limiting the pair's downside potential. For this reason, I did not sell

Jakub Novak 09:01 2025-06-02 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on June 2. Review of Yesterday's Forex Trades

The price test at 1.3494 occurred when the MACD indicator moved significantly above the zero mark, limiting the pair's upside potential. For this reason, I did not buy the pound

Jakub Novak 09:01 2025-06-02 UTC+2

EUR/USD: Simple Trading Tips for Beginner Traders on June 2. Review of Yesterday's Forex Trades

The price test at 1.1347 occurred when the MACD indicator had just started moving upward from the zero mark, confirming a proper entry point for buying the euro. However, after

Jakub Novak 09:01 2025-06-02 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.