European Natural Gas Prices Decline on Hormuz Strait Agreement

The Hormuz Strait agreement could reduce the geopolitical risk premium on energy supply security, potentially putting downward pressure on natural gas prices. Technically, the RSI approaching the overbought zone at 68, along with the rapid short-term price increase, may set the stage for profit-taking. The MACD is positive but close to the signal line, indicating weakening momentum. While prices above the SMA20 and SMA50 support the medium-term trend, the news flow could trigger a short-term downward correction. Therefore, I expect a limited pullback over a 1-3 day horizon.

Brent crude has fallen 3.5% over the last 24 hours to $84.63, with the RSI at 21.8, indicating oversold conditions. The Strait of Hormuz agreement has reduced geopolitical risk premium, easing supply concerns and putting pressure on prices. MACD is in negative territory and below the signal line, suggesting weak short-term momentum. However, oversold conditions and price below the SMA20 could increase the likelihood of a technical rebound. Therefore, while the downtrend persists, a limited pullback or sideways movement is possible over the next 1-3 days.

WTI crude oil may remain under short-term pressure despite its RSI being in oversold territory at 23.8. The MACD is in negative territory and below the signal line, indicating weak momentum. The price is trading below the 20- and 50-day moving averages, pointing to a sustained downtrend. News of the Strait of Hormuz agreement could ease energy supply security concerns, adding further downward pressure on oil prices. However, given the oversold conditions, the possibility of a short-term technical rebound should not be ruled out.