Natural gas climbs on cold weather forecasts; oil markets rally as demand optimism grows.

The energy markets showed signs of strength during holiday-thinned trade on Christmas Eve, with natural gas and crude oil prices gaining ground as traders acted on bullish forecasts. Cold weather predictions for early January pushed natural gas prices higher, while WTI and Brent crude saw a boost as market optimism overshadowed analyst concerns.

Natural Gas Soars Amid Winter Chill
Natural gas prices surged by 3%, buoyed by updated weather forecasts predicting colder-than-expected temperatures in early January. This renewed focus on increased heating demand drove natural gas prices above the critical resistance level of $3.80–$3.85, setting the stage for a potential climb towards $4.00–$4.05.

From a technical perspective, the recent breakout signals bullish momentum in the natural gas market, with analysts closely watching the $4.00 mark for further directional cues.

WTI Oil Gains on Demand Optimism
WTI crude oil prices climbed by 1% as traders bet that demand may outpace current estimates in the coming months. Thin holiday trading volumes provided an additional boost to upward price movements.

Currently, WTI is testing the $70.00 resistance level. A break above this psychological barrier could see prices rally towards the $72.00–$72.50 range, marking a significant recovery in the wake of recent market volatility.

Brent Oil Eyes Key Resistance
Brent crude, meanwhile, edged 0.73% higher, attempting to settle above the $73.50 level. Bullish sentiment persisted despite a stronger dollar, which typically weighs on oil prices. Brent is also flirting with the 50-day moving average at $73.33—a critical technical indicator that, if surpassed, could ignite additional buying momentum.

Market participants are closely monitoring these price levels for signs of sustained upside. With global oil demand forecasted to rise and concerns about supply tightening on the horizon, traders remain cautiously optimistic heading into 2025.

Risks and Market Outlook
While the rally in natural gas and oil markets reflects bullish sentiment, risks remain. A stronger US dollar and potential macroeconomic headwinds could cap gains. Additionally, thin trading volumes during the holiday season may exaggerate price movements, necessitating careful analysis.

As traders position themselves for the year ahead, the energy markets appear primed for volatility. The balance between demand recovery, geopolitical developments, and weather patterns will likely shape price trajectories in the weeks to come.