Crude Oil and Natural Gas Technical Analysis: Key Levels in Focus Amid Red Sea Tensions

Oil prices rebounded from the long-term support at $66 as the market absorbed mixed signals. Strong US gasoline demand supported prices, with consumption rising 6% to 9.2 million barrels per day. However, crude inventories surged by 7.1 million barrels, defying expectations of a draw. This unexpected surge in production reflects ongoing production strength, but high gasoline usage signals healthy economic activity and robust travel demand.

Moreover, the tensions in the Red Sea added a layer of geopolitical risk. Recent Houthi attacks on commercial vessels renewed concerns over shipping disruptions. These incidents raise concerns about supply chain disruptions, particularly for oil transportation, which typically drives prices higher. The situation remains volatile and could escalate rapidly if further attacks occur.

The US Energy Information Administration forecasted lower oil output in 2025. Declining prices have led American producers to scale back drilling. This reduction in future supply adds upward pressure on prices. Meanwhile, Trump’s announcement of a 50% tariff on copper could affect broader commodity sentiment, increasing uncertainty in energy markets.

On the other hand, OPEC+ plans to boost supply by 548,000 barrels per day in August. UAE officials emphasised that markets are absorbing extra barrels without building large inventories. This indicates that global demand may be stronger. If inventory levels remain low, oil prices could stay elevated despite increasing supply.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – High Volatility

The daily chart for WTI crude oil (CL) shows that the price has rebounded from the 50-day SMA and reached the 200-day SMA. The rebound from the long-term support zone around $66 reflects strong volatility. However, the overall trend remains downward. This heightened volatility is driven by ongoing uncertainty stemming from the ongoing tensions between Iran and Israel. A break above $69 would signal further upside toward the $72.50 level. However, a break above $77 is necessary to establish sustained upward momentum.

WTI Oil 4-Hour Chart – Double Top

The 4-hour chart for WTI crude oil shows that the price is consolidating within a descending broadening wedge pattern, reflecting strong uncertainty. The emergence of a double top near the $77 level, followed by a correction toward the $64 area, indicates bearish price action. However, the ongoing consolidation suggests that volatility may persist. A break below $64 would signal further downside, while a break above $77 would initiate strong upward momentum in oil prices.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Ascending Channel

The daily chart for natural gas (NG) shows that the price has broken below the ascending channel and initiated a move toward the $3.00 area. Strong support lies between $3.00 and $2.90, where a rebound from this zone may trigger the next upward momentum in natural gas prices. The price remains below the 200-day SMA, which suggests further downside risk.

Natural Gas 4-Hour Chart – Consolidation

The 4-hour chart for natural gas indicates that the price is consolidating within the $3.00 to $5.00 range. The price has not broken above the $3.80 level and continues to show signs of weakness toward the $3.00–$2.90 zone. Support around the $3.00 area may trigger another rebound toward the $4.00 level. A break below $2.90 would signal further downside, while a break above $5.00 could initiate strong upward momentum in natural gas prices.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index indicates that the price remains under bearish pressure, continuing to trend downward after rebounding from the 96.50 level. The index has broken below the orange zone, which previously acted as a long-term support area. This breakdown has confirmed a bearish trend, which is likely to continue toward the 90.00 region.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart also shows that the US Dollar Index is trading within a descending channel and continues its downward trend after rejecting the channel resistance. Strong support lies near the 94 level. A break below 94 could push the index toward the 90 region, aligning with the red trendline.