Oil Prices Struggle Between Oversupply and Geopolitical Premium

The crude complex continues to trade inside a fragile balance as supply additions from Iraq, Libya, and Kuwait battle against escalating geopolitical flashpoints in Eastern Europe and the Middle East. West Texas Intermediate (CL=F) slipped to $62.49 per barrel, down 0.3% on the day, while Brent (BZ=F) eased to $66.44, also down 0.4%. Despite headlines of Russian airspace incursions over Estonia and fresh strikes on Ukraine, traders are refusing to lift crude above its resistance zone near $67, signaling that oversupply fears carry greater weight than the risk premium.

WTI Crude Testing $62 as Market Eyes $60 Floor

U.S. benchmark WTI has repeatedly tested the $62 support, a level that has been in play since early August. If the market fails to defend this zone, the next target becomes $60, widely viewed as the line where U.S. shale economics begin to wobble. Technical charts show resistance stacked at $65 per barrel, with the 50-day moving average capping rallies. A breakdown below $62 could trigger algorithmic selling, exposing the $59–$60 corridor. The price structure has turned fragile enough that even mild inventory builds in this week’s EIA report could drive WTI into the high $50s.

Brent Crude Stuck in $65–$69 Range

Brent futures remain boxed between $65 and $69 per barrel, a sideways trade that has persisted for seven weeks. Today’s $66.44 print reflects both demand headwinds and unexpected supply resilience. Resistance remains clustered around $67–$67.50, with the 200-day moving average looming near $68.80. Without a supply cut from OPEC+ leaders, Brent risks a retracement to $63, a level not seen since July. Traders highlight that even geopolitical escalations in Israel, Gaza, and Eastern Europe failed to spark sustainable upside, a clear indication that fundamentals are overshadowing risk headlines.

Iraq’s Surge to 3.45 Million Barrels Per Day Pressures Market

Iraq has pushed exports to 3.4–3.45 million barrels per day in September, its highest level in months, after OPEC+ relaxed quotas. Baghdad is also preparing to restart pipeline flows from Kurdistan through Turkey, which could return another 400,000 barrels per day to global supply. The increased Iraqi presence comes as Kuwait confirmed a crude capacity of 3.2 million bpd, the largest in more than a decade. These additions come at a time when demand forecasts into Q4 2025 are softening, adding further weight to bearish sentiment.

Libya Boosts Output to 1.39 Million Bpd

Libya’s National Oil Corporation confirmed production of 1.388 million barrels per day, a sharp recovery aided by returning international partners such as BP, Shell, Chevron, and TotalEnergies. Condensate output of 52,730 barrels and 2.57 billion cubic feet of gas further emphasized the rebound. The government has targeted 2 million bpd by year-end, and if realized, that would flood markets at a time when both Brent and WTI are already struggling to maintain support. Indian refiners have stepped up purchases, and European imports of Libyan crude surpassed $22 billion in 2024, underscoring Libya’s growing influence.

Iran Gas Export Slump Raises Energy Security Questions

While oil flows grow, Iran’s gas exports to Iraq have collapsed, constrained by U.S. sanctions, decaying pipelines, and Iraq’s drive to increase its own domestic production. The disruption has left Baghdad scrambling to secure power generation during peak periods, potentially redirecting some demand back into crude oil for domestic use. For markets, the collapse in Iranian gas flows carries symbolic weight — it reinforces the fragility of Middle Eastern energy supply chains. Yet despite this geopolitical fragility, Brent failed to hold above $67.15 when tested, a signal that traders remain more focused on physical crude balances than regional instability.

Russia and Middle East Geopolitics Fail to Ignite Rally

Russian fighter jets entering Estonian airspace, ongoing attacks on western Ukraine, and Western recognition of a Palestinian state all injected volatility into global headlines. Normally, such events would spark sharp crude rallies, but the absence of sustained buying shows that traders are discounting politics without direct supply losses. WTI and Brent retreated almost immediately after knee-jerk gains, reinforcing the bearish undertone. Brent, which briefly tested $67.15, slid back under $66.50 by midday.

Macro Pressures and the Federal Reserve Overhang

Monetary policy is adding another layer of weakness. Federal Reserve officials have pushed back against the need for additional rate cuts despite inflation running above 2%. That keeps the U.S. dollar strong and caps global oil demand. Earlier this month, dovish bets briefly drove WTI above $65, but with Fed rhetoric shifting, crude lost its monetary tailwind. Unless macro conditions change, oil prices will remain tied to physical oversupply rather than speculative relief rallies.

Buy, Sell, or Hold on Crude at Current Levels

With WTI at $62.49 and Brent at $66.44, the market sits on critical support zones. Iraq and Libya’s aggressive production adds bearish momentum, while Iran’s fragility and Russian geopolitical tensions provide only temporary spikes. The most realistic scenario is further range-bound trade with downward bias. If China steps up stockpiling as it did in September, support could hold and drive Brent back toward $69. But without that demand, both benchmarks risk slipping lower. Based on the balance of data, the outlook is cautiously bearish, leaning Hold, with a potential test of $60 for WTI and $63 for Brent in the near term.

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Natural Gas Futures (NG=F) Under Pressure as Storage Surplus Expands

Natural gas futures are once again trading soft, with the October contract settling Friday at $2.888/MMBtu, down nearly 1.8% on the week. The U.S. Energy Information Administration reported a +90 Bcf storage injection for the week ending September 12, well above both the consensus of +78 Bcf and the five-year average of +74 Bcf. Total inventories now stand at 3,433 Bcf, which is 204 Bcf, or 6.3%, above the five-year seasonal norm, leaving the market oversupplied even as year-on-year comparisons show only a marginal 0.1% shortfall.

Oversupply and Production Trends Keep NG=F Below $3

Supply-side dynamics remain a key drag on NG=F pricing. Lower-48 dry gas output reached 107.6 Bcf/d, up 6.1% year-over-year, while Canadian imports are stable. LNG exports of 15.3 Bcf/d remain firm but insufficient to absorb the excess supply, particularly as domestic consumption has weakened. U.S. consumption fell to 98.5 Bcf/d last week from 99.6 Bcf, with residential and commercial demand sliding as September temperatures turned mild. The only bright spot has been the power sector, where gas-for-power demand has held up, but cooling needs are now waning as forecasts point to cooler temperatures across major demand centers beginning September 24.

Technical Analysis: NG=F Struggles to Hold Key Support

Price action shows natural gas futures consolidating within a narrow retracement zone. Support at $2.887 has been tested multiple times in early trade, with failure to hold likely exposing a deeper decline toward $2.70–$2.65/MMBtu, where a longer-term trend line dating back to February 2024 resides. To the upside, bulls need to retake the $2.947–$3.01 cluster, which includes the 50-day EMA at $3.00. Above this, resistance lies at $3.20, a level that has consistently capped rallies this month. Momentum indicators remain weak: RSI sits at 38, showing bearish control, while MACD remains in negative territory, highlighting the lack of conviction for a reversal.

Seasonal Factors and Contract Roll Shape Near-Term Outlook

The transition from October to November contracts adds another element to price action. November futures tend to reflect higher demand expectations as winter approaches, yet current weather forecasts are not providing the spark bulls need. Late-season warmth is fading, but cooler conditions are arriving too slowly to offset the pressure of storage builds. With injection season still in play and stockpiles running above norms, traders remain cautious. Some market participants expect prices could dip toward $2.70 before finding stronger buying interest aligned with heating demand.

Global LNG and Export Capacity Set to Influence 2026 Pricing

Longer-term fundamentals remain more constructive. The EIA projects U.S. Henry Hub prices will average $3.70/MMBtu in Q4 2025, climbing toward $4.30 in 2026. Growth in LNG capacity, with projects such as Corpus Christi Stage 3 and Plaquemines Phase 2 adding up to 6 Bcf/d by late 2026, is expected to absorb more domestic supply. U.S. LNG exports are forecast to rise from 12 Bcf/d in 2024 to 15 Bcf/d in 2025 and 16 Bcf/d in 2026, with Asian demand leading the growth. This dynamic should gradually rebalance the oversupply and keep natural gas prices firming into the medium term.

Market Verdict: Bearish Short Term, Bullish Mid Term

At present levels near $2.89, natural gas futures remain under bearish pressure as storage surpluses and mild weather cap any rally attempts. The short-term risk leans toward a test of $2.70–$2.65, while a break above $3.01 could enable a corrective move toward $3.20. Structurally, however, expanding LNG exports, resilient industrial demand, and the transition into winter favor firmer pricing into late 2025 and 2026. Based on current data, NG=F is a Hold in the short term with a Buy bias into 2026, as global demand growth and export capacity expansion offer a more supportive backdrop than current storage-heavy conditions suggest.

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XAU/USD Current price: $3,736.92

• Financial markets keep digesting the latest Fed decision and dropping the US Dollar as a result.
• American data spread throughout the week should confirm or deny speculative interest perspectives.
• XAU/USD is again overbought, but there are no technical signs of upward exhaustion.

Spot Gold keeps rallying to record levels, reaching $3,73 a troy ounce on Monday and holding nearby in the American session. Despite a generalized optimism, demand for the bright metal continues amid broad US Dollar (USD) weakness.

Financial markets are still digesting the latest United States (US) Federal Reserve (Fed) monetary policy announcement. The US central bank lowered the benchmark rate as expected in the September meeting, and hinted at additional cuts in November and December. American data scheduled for this week will help speculative interest confirm or deny their beliefs on the matter.

S&P Global will publish the preliminary estimates of the September Purchasing Managers’ Indexes (PMIs) on Tuesday, anticipated to show business activity expanded at a healthy pace. The final Q2 Gross Domestic Product (GDP) estimate will be out on Thursday, while on Friday, the country will release updated Personal Consumption Expenditures (PCE) Price Index figures, the Fed’s favorite inflation gauge.

XAU/USD short-term technical outlook

The XAU/USD pair is firmly up for a second consecutive day, and technical readings in the daily chart suggest further advances are still in the docket. The Relative Strength Index (RSI) indicator bounced from its 70 line, and maintains a strong upward slope within overbought readings. At the same time, the Momentum indicator consolidates well above its 100 line, lacking directional strength. Finally, the pair runs beyond bullish moving averages, with the closest being the 20 Simple Moving Average (SMA) at around $3,581.

The 4-hour chart for XAU/USD shows technical indicators are partially losing their bullish slopes after reaching overbought readings, still holding within extremes and without signs of changing course. At the same time, the bright metal runs beyond all its moving averages, with a mildly bullish 20 Simple Moving Average (SMA) hovers around $3,674.00, while the 100 and 200 SMAs accelerated north well below the shorter one.

Support levels: 3,724.10 3,707.80 3,691.50

Resistance levels: 3,750.00 3,765.00 3,780.00

• Gold hits fresh record highs above $3,720 on cautious markets amid geopolitical tensions.
• The next potential targets are $3,730 and $3,760.
• The technical picture shows overbought conditions, daily RSI suggest incipient bearish divergence.

Gold bounced up from the $3,630 area on Friday and is extending gains on Monday, supported by a cautious market mood and hopes of further Fed easing. The precious metal is trading at $3,720, with the following potential targets at $3,730 and $3,760.

The fundamental backdrop remains supportive. European markets have opened on a moderately negative note, as tensions remain high between Russia and its European partners, while in the Middle East, Israel’s occupation of Gaza is generating an increasing wave of opposition among Western countries.

Technical Analysis: Gold is strongly bullish but looks overextended

The technical picture, on the other hand, is sending warning messages. The daily chart shows the pair at overbought levels, after having rallied more than 12% in one month. RSI is starting to suggest some bearish divergence, and the MACD shows an impending bearish cross, which should warn buyers.

On the upside, immediate resistance is the <27.2% Fibonacci retracement of last week’s pullback, at $3,730, ahead of the 161.8% retracement of the same cycle, at $3,760. Beyond here, the $3,800 round level emerges as a potential target.

To the downside, the previous all-time high, at $3,707, might provide support ahead of the $3,615-3,630 area (September 11, 18 lows). Further down, the September 3 high and September 8 low, at $3,580, would come into focus.

The EURJPY pair is forced to form bearish correction wave after hitting the target at 174.45, affected by stochastic attempt to exit the overbought level, noticing its fluctuation near the breached barrier, forming an extra support at 173.40.

The price success to settle above the current support will provide new chance for forming bullish waves, repeating the pressure on 174.40 level, and surpassing it will make it reach the next target near 175.20, while its surrender to the negative pressures by its move below the support will force it to delay the bullish attack, forming more of the correctional trading, to reach 172.80 initially, reaching the support of the bullish channel at 171.35.

The expected trading range for today is between 173.40 and 175.20

Trend forecast: Bullish

The (silver) price surged in its last intraday trading, breaching the critical resistance level of $42.90, which represents our suggested target in our previous forecast, supported by its continuous trading above EMA50 and under full dominance for the main bullish trend on the short-term trading, and its trading alongside supportive trendline for this track, on the other hand, we notice the emergence of negative overlapping signals on the relative strength indicators, after reaching overbought levels, which might reduce the upcoming gains.

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The (Brent) price rose in its last intraday trading, in an attempt to recover some previous losses, and attempts to offload its clear oversold conditions on the relative strength indicators, especially with the emergence of the positive signals from there, amid the dominance of the main bearish trend on the short-term basis, with the continuation of the negative pressure that comes from its trading below EMA50, intensifying the negative pressure around the price, and reduces the chances of its recovery on the near-term basis.

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• Silver challenges a multi-month-old ascending channel resistance at the start of a new week.
• A slightly overbought RSI on the daily chart warrants caution before placing fresh bullish bets.
• Any corrective slide below $43.00 could be seen as a buying opportunity and remain limited.

Silver (XAG/USD) builds on Friday’s breakout momentum above the $43.00 mark and touches a fresh high since September 2011 at the start of a new week. The white metal trades around the $43.25 area during the Asian session, up 0.35% for the day, flirting with the top end of an ascending channel extending from the April swing low.

The aforementioned channel points to a well-established uptrend and backs the case for a further near-term appreciating move for the XAG/USD. That said, the Relative Strength Index (RSI) on the daily chart is flashing slightly overbought conditions and makes it prudent to wait for some near-term consolidation or a modest pullback before placing fresh bullish bets.

Any corrective slide below the $43.00 round figure, however, is more likely to attract fresh buyers near the $42.55 region. This, in turn, should help limit the downside for the XAG/USD near the $42.20-$42.15 region. This is closely followed by the $42.00 mark, below which the commodity could slide to the $41.65 area before eventually dropping to test sub-$41.00 levels.

On the flip side, acceptance above the ascending channel resistance will be seen as a fresh trigger for bullish traders and allow the XAG/USD to test the September 2011 swing high, around the $43.40 region. The positive momentum could extend further towards reclaiming the $44.00 round figure en route to the August 2011 peak, around the $44.25 region.

Silver daily chart

• Gold price trades with mild gains around $3,685 in Monday’s early Asian session. 
• Signals of monetary policy easing from the Fed and rising geopolitical risks support the Gold price.
• Traders brace for the Fedspeak later on Monday for fresh impetus. 

The Gold price (XAU/USD) posts a modest gain near $3,685 during the early Asian session on Monday. The yellow metal edges higher as the US Federal Reserve (Fed) cut the interest rates at its September meeting, as widely expected. Traders will take more cues from the Fedspeak later on Monday. 

The Fed reduced its benchmark rate by 25 basis points (bps) last week, the first rate cut of 2025. This decision was supported by signs of a softening labor market and concerns about employment risks, despite inflation remaining somewhat elevated. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

Fed Chair Jerome Powell emphasized the rate cut as a “risk-management cut” and stated that future decisions would be made “meeting by meeting,” suggesting a less dovish than expected easing cycle than some investors anticipated. This, in turn, might lift the US Dollar (USD) and weigh on the USD-denominated commodity price. 

Traders will also monitor the developments surrounding geopolitical risks. CNN reported that Russia carried out a major drone and missile attack across the country overnight into Saturday, according to Ukrainian President Volodymyr Zelensky. Despite diplomatic attempts to resolve the conflict, the war has increased in recent months. Geopolitical tensions in the Middle East and Eastern Europe could boost a traditional safe-haven asset like Gold. 

While long-term fundamentals remain constructive, a late-week rebound in the U.S. Dollar Index to 97.646 and rising Treasury yields (10-year at 4.131%, 30-year at 4.743%) limited upside momentum. These moves raise the opportunity cost of holding gold, though they have not altered the underlying bullish structure.

Gold Price Projections: Wall Street Targets Raised

Citi raised its 3-month gold price forecast to $3800, citing fiscal risks and fragile labor conditions. Deutsche Bank projects an average of $4000, pointing to continued central bank buying and investor demand. In India, physical premiums surged to a 10-month high despite record nominal prices, reflecting robust consumer interest.

Gold Price Forecast: Eyes on PCE Inflation and Sentiment Data

Markets are now focused on this Friday’s release of the Fed’s preferred inflation gauge—Core PCE—and the final September University of Michigan Consumer Sentiment Index. July’s core PCE rose to 2.9% year over year, the highest since February. The Fed expects inflation to stay above target through 2026, while sentiment data suggests rising consumer unease about inflation and jobs. If PCE remains elevated and sentiment deteriorates, expectations for further rate cuts may strengthen, supporting gold’s upside.

Market Outlook: Bullish Above Key Support