Energy Market Outlook: Will China’s Rising Demand Sustain Oil and Gas Prices?

Key Insights:

• China’s crude oil consumption rose by 2.1%, fueling optimism for sustained demand, but looming recession fears and new trade tariffs pose challenges for long-term price stability.
• WTI crude oil is consolidating around $67.65, with critical resistance at $68.52. A breakout could push prices toward $69.46.
• Brent crude struggles below $71.75, encountering resistance from a triple-top pattern. A drop below $69.87 could trigger further downside pressure.

Market Overview

The global energy markets remain volatile as crude oil prices grapple with fluctuating demand trends, ongoing geopolitical risks, and evolving trade policies. Brent and WTI crude showed modest gains, supported by increasing instability in key regions and China’s renewed economic stimulus efforts, including enhanced consumer spending initiatives and investment incentives.

China’s recent 2.1% increase in crude oil consumption has raised expectations of higher energy demand, yet global economic uncertainty continues to cast a shadow over the long-term outlook. Concerns over slowing economic growth and heightened trade tariffs, particularly from the U.S., could weigh on oil markets in the months ahead.

Natural Gas Price Forecast

Natural gas is currently trading around $4.06, reflecting a slight decline of 0.12% as investors navigate crucial technical levels. The 50-day exponential moving average (EMA) at $4.16 is acting as a near-term resistance, while the 200-day EMA at $3.90 provides a broader uptrend indication.

• Key Support Levels: $3.97 (pivot point), $3.75, and $3.51.
• Resistance Levels: $4.22 and $4.43.

A sustained move above $4.22 could confirm bullish momentum, whereas a drop below $3.97 might signal increased selling pressure.

WTI Crude Oil Forecast

WTI crude oil is currently trading at $67.65, showing minor fluctuations as it struggles to gain upward momentum. The 50-day EMA at $67.33 provides short-term support, while the broader trend remains bearish below the 200-day EMA at $69.47.

• Resistance Levels: $68.52 and $69.46.
• Support Levels: $67.08 (pivot point), $66.39, and $65.27.

WTI remains in a consolidation phase, and a decisive breakout above $68.52 could push prices higher, while a drop below $67.08 might lead to further downside pressure.

Brent Crude Oil Forecast

Brent crude oil is trading at $71.38, encountering resistance near the pivot level of $71.75. The 50-day EMA at $70.75 offers immediate support, while the 200-day EMA at $72.91 indicates longer-term selling pressure.

• Resistance Levels: $71.75, $73.38, and $74.89.
• Support Levels: $69.87 and $68.28.

A triple-top pattern near $73.38 is limiting Brent’s upward movement. Failure to hold above $71.75 may reinforce bearish sentiment, while a drop below $69.87 could trigger further losses.

Final Thoughts

While China’s increased demand provides a short-term boost to oil and gas prices, lingering concerns over global economic growth, trade disputes, and supply fluctuations may create headwinds. Traders should monitor key technical levels and geopolitical developments to navigate potential price swings in the coming weeks.

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