Oil and Natural Gas Analysis: Energy Prices Gain on Supply Draws and Geopolitical Risks

WTI crude oil (CL) extended its rebound for the second day, climbing above $64.50 per barrel. The recovery followed a two-week low hit on Monday. Strong inventory data and rising geopolitical risks injected fresh momentum into the market.

The chart below shows a draw of 0.6 million barrels in crude stocks. Refinery runs also held steady, signalling resilient demand despite mixed trade flows. This tighter supply outlook helped shift sentiment back to the upside.

Moreover, geopolitical tensions added further support to oil prices. Iran pledged to continue selling oil to China despite the risk of sanctions. At the same time, President Trump warned Europe to halt Russian energy imports or face tariffs. These developments fueled supply concerns and continued to exert upward pressure on oil prices.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Support Zone

The daily chart for WTI crude oil indicates that prices are rebounding from the support of the ascending channel, located near the $60 region. The immediate resistance remains at the 200-day SMA around $67. Oil is also attempting to close above the 50-day SMA, which signals that prices are in the process of rebounding toward the $67 level.

A break below $60 would trigger negative price action, while a break above $67 would open the door for further upside toward the $74 region. However, as long as prices remain below the red trendline near $74, the overall trend in oil continues to lean bearish.

WTI Oil 4-Hour Chart – Consolidation

The 4-hour chart for WTI crude oil shows substantial consolidation between $61.60 and $65.50 over the past two months. Oil prices have repeatedly failed to break below the $60 level, with multiple attempts forming a solid support base.

A break above $65.50 would likely drive prices toward the $70 region, while a break below $60 would trigger negative price action and open the way for further downside.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Bullish Construction

The daily chart for natural gas (NG) shows that prices have rebounded from the $2.60 support region. This level aligns with the neckline support of the complex inverted head-and-shoulders pattern formed in 2024.

Prices are likely to rebound toward the $5 area. However, trading remains below the 50-day SMA. Moreover, the 50-day SMA remains below the 200-day SMA, indicating ongoing uncertainty. A break above $3.60 is required for the bulls to regain control of the market.

Natural Gas 4-Hour Chart – Bullish Construction

The 4-hour chart for natural gas shows that the price is consolidating between the $2.60 and $3.18 levels. A break above $3.18 would trigger bullish price action toward the $4.70 area, while a break below $2.60 would lead to negative momentum and extend the downside in gas prices.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Negative Price Action

The daily chart for the US Dollar Index shows a rebound after the Federal Reserve’s rate cut, with prices bouncing from the 96.50 level. This move is now testing resistance at the 50-day SMA, and a break above it could trigger a rally toward the 100.50 area.

On the downside, a failure to hold above 96.50 would revive bearish momentum and extend negative price action in the coming weeks.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart for the US Dollar Index shows that prices have been consolidating above the long-term support at 96.50. The index is rebounding from the 97.20 level, but strong resistance remains near 98.60.

The chart indicates that the index is still consolidating above the key support zone at 96.50. A break below this level would introduce intense selling pressure in the US Dollar Index, while a break above 100.50 is required to ease the prevailing bearish outlook.