WTI crude oil (CL) prices gained momentum and approached $69.60 in early Thursday trading. This rally followed US President Donald Trump’s announcement of a 25% tariff on countries buying oil from Venezuela. This move raised concerns about reduced global supply and boosted oil prices to a near four-week high.
Moreover, falling U.S. crude inventories added to the bullish sentiment. The EIA reported a 3.341 million barrel drop in stockpiles last week, far exceeding expectations. This was the largest decline in 13 weeks. The unexpected drawdown reinforced the view of tightening supply and supported further gains in oil prices. Furthermore, the crude stocks at the Cushing, Oklahoma, delivery hub also dropped by 0.755 million barrels.
However, the broader term trend remains bearish and therefore the upside may be limited. A ceasefire agreement between Russia and Ukraine over maritime and energy targets eased some global supply fears. The US also moved to relax select sanctions on Moscow, potentially balancing the recent supply concerns triggered by the Venezuela-related tariff decision.
The daily chart for WTI crude oil shows that the price is rebounding from the long-term support at $66. However, the 50-day SMA remains downward trending, indicating a bearish trend. Strong resistance lies between the $70 to $72.50 area, and the price is likely to move lower from this resistance zone.
The 4-hour chart for WTI crude oil shows resistance at the falling wedge pattern around $70. This level also aligns with the channel resistance formed from the $66 low. A break above this area could trigger an upward move in WTI crude oil prices.
The daily chart for natural gas (NG) shows consolidation around the 50-day SMA, while the price continues to decline and reaches the strong support zone between $3.60 and $3.50. A break below this level could push the price lower toward the $3.20 to $3.00 range. As the RSI remains below the mid-level, the price may continue to correct lower, although the overall trend remains bullish.
The 4-hour chart for natural gas shows the formation of an ascending channel, with the price approaching the channel support near $3.50. The price is corrected from the orange zone, which is highlighted as a strong resistance area. A break below $3.50 may push prices toward $3. As long as the price remains above $3, the bullish trend remains intact.
The US Dollar Index rebounded from the support at 103.50 and is approaching the resistance near 105.20. The index remains below the 200-day SMA, and the trend is still negative. A break below 103.50 could push the index toward 100.65. On the other hand, a break above 105.20 may drive the index higher toward 107.
The 4-hour chart shows that the rebound from 103.50 has a bullish structure, and the index is trading within a descending channel. The daily resistance at 105.20 aligns with the channel resistance. A break above this level could push the index toward 107.
Muhammad Umair is a finance MBA and engineering PhD. As a seasoned financial analyst specializing in currencies and precious metals, he combines his multidisciplinary academic background to deliver a data-driven, contrarian perspective. As founder of Gold Predictors, he leads a team providing advanced market analytics, quantitative research, and refined precious metals trading strategies.
