Crude oil and natural gas markets are navigating an uneven recovery amid persistent supply disruptions stemming from ongoing tensions in the Middle East, with WTI and Brent crude posting modest rebounds from recent support levels while technical indicators continue to signal prevailing bearish sentiment, according to analysis published by FX Empire on August 3, 2026. The fundamental backdrop for energy prices remains defined by the incomplete restoration of flows through the Strait of Hormuz. Tanker traffic and Gulf production continue to fall short of pre-conflict levels despite incremental diplomatic progress and partial reopenings during the summer months.
The International Energy Agency and several market analysts have confirmed that global supply remains significantly constrained relative to pre-war benchmarks. Global inventories have partially absorbed earlier supply shocks, though strategic petroleum reserves across major consuming nations have been drawn down substantially. Demand has shown some elasticity in response to tighter supply conditions, with lower import volumes recorded across parts of Asia — most notably China — helping to partially rebalance the market.
Non-OPEC supply growth and increased exports from the Atlantic Basin have offset some of the shortfall left by lagging production recovery in the Gulf, where operational and security challenges have delayed the restart of field-level output. Natural gas markets are facing analogous pressures. LNG exports from Qatar and the United Arab Emirates — which typically represent a significant share of global throughput — remain severely constrained by limited transit through the Strait of Hormuz.
The IEA anticipates that global LNG supply will stabilize through 2026, as higher output from North America, Africa, and Australia offsets production losses from Gulf Cooperation Council nations. Demand in Asia has softened as fuel switching toward coal and reductions in industrial activity reduce LNG absorption, while European buyers continue to compete to fill seasonal storage amid a slower-than-normal pace of LNG arrivals. In the United States, robust domestic production and adequate storage levels have insulated the Henry Hub market from the worst of the global tightness, though elevated LNG export volumes are drawing gas from the domestic system.
The near-term outlook for both oil and gas hinges on the pace and durability of transit normalization in the Middle East, as well as further demand-side responses from major importing economies. On the technical side, WTI crude has staged a small recovery after approaching the $78.30 support area, though the broader picture remains bearish. The price continues to trade well below the 50-EMA at $82.65 and the 100-EMA at $83.23, with the $83.30 level — formerly a support zone — now acting as major resistance.
The RSI has improved marginally but remains below the 50 mark, indicating an absence of meaningful buying momentum. Primary support is identified at $78.27, with a secondary level at $75.39. Resistance is seen at $80.60 and $83.31.
Analysts warn that the current recovery lacks conviction and that a bearish retest of $78.30, with a higher downside target of $75.40, remains the base-case scenario unless buyers reclaim $83.30. Brent crude is showing a similarly tentative recovery after finding support at $80.60, but prices remain capped below the 50-EMA at $86.15 and the 100-EMA at $86.93. The benchmark has slipped beneath the 23.6% Fibonacci retracement level at $85.68, reinforcing bearish expectations despite the recent bounce.
The 38.2% Fibonacci level at $88.80 aligns with moving average resistance overhead. The RSI has recovered from oversold territory but remains below the 50 level, suggesting that bearish sentiment still predominates. Support is marked at $83.80 and $80.60, while resistance levels stand at $85.68, $88.80, and $91.33 respectively.
The outlook remains bearish so long as Brent trades beneath $85.68. Natural gas is consolidating near the $2.75 level, which corresponds to the 23.6% Fibonacci retracement and the lower boundary of a rising channel. Prices are trading slightly below the 50-EMA at $2.753 and the 100-EMA at $2.765, with a neutral RSI suggesting that directional conviction is absent for the time being.
Immediate resistance is seen at $2.805, followed by $2.849 and $2.891, while initial support is at $2.752 with stronger backing at $2.666. A sustained move above $2.805 would be required to trigger bullish momentum toward the $2.85–$2.89 range. Source: FX Empire / Arslan Ali, August 3, 2026.
Source: fxempire.com