Crude Oil Breaks Resistance, Targets October High

Crude oil breaks through resistance, targeting October high at 93.00, while natural gas struggles to overcome hurdles, risking further losses.

CRUDE OIL, WTI, NATURAL GAS, NG – OUTLOOK

• Crude oil is attempting to cross above a tough barrier.
• Natural gas has posted a lower high, risking further losses.

What is the outlook for crude oil and natural gas, and what are the key levels to watch?

Crude Oil Breaks Resistance, Targets October High

Crude oil has embarked on an impressive journey as it attempts to overcome a longstanding resistance barrier that has posed challenges since late 2022. This horizontal trendline, firmly established at approximately 83.50, has finally yielded to the relentless determination of crude oil, triggering a much-awaited breakout from a prolonged period of sideways movement. As a result, the path ahead appears to lead to the coveted October high of 93.00.

This bullish surge follows a prior ascent in July when crude oil soared above the Ichimoku cloud and the 89-day moving average. These technical indicators underscore a rejuvenated upward momentum, echoing our earlier insights. Moreover, the market has found formidable support in the form of the 200-week moving average in recent months.

Nevertheless, it’s imperative to exercise caution, as the momentum accompanying the break above 83.50 seems somewhat subdued compared to the magnitude of price gains. The sustainability of this breakout remains contingent on crude oil’s ability to maintain its upward trajectory. Failure to do so could raise concerns about the authenticity of the breakout. To address this, immediate support is identified at the resistance-turned-support level of 83.50, with more robust support residing at the August low of 77.50.

Natural Gas Grapples With Ongoing Challenges

In stark contrast, the natural gas market confronts a set of persistent challenges, with the risk of further losses looming large. Recent developments, including the formation of a potential lower top or secondary high, suggest that the five-month-long rebound in natural gas may have reached its conclusion—a concern that we’ve been closely monitoring in our past two updates.

This ominous signal originates from natural gas’s inability to surmount a pivotal hurdle in the 3.00-3.05 range, encompassing the March high and the 30-week moving average. The fact that it has made limited progress toward the 200-day moving average, coupled with its hesitant recovery trajectory since early 2023, casts doubts on the emergence of a renewed bull market for natural gas. It increasingly appears that natural gas may need to undergo a protracted period of consolidation and base-building before a sustainable uptrend can take shape.

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