Oil and Natural Gas Analysis: Modest OPEC+ Output Increase Amid Geopolitical Risks

Crude oil prices show strong uncertainty as traders react to the latest OPEC+ decision and rising geopolitical tensions. WTI crude oil consolidates between $62 and $64, while Brent crude oil holds between $65 and $70. However, the prices rebounded on Monday and are looking for the next direction. A combination of tighter supply expectations and risk-driven sentiment keeps oil prices volatile.

OPEC+ agreed to a modest supply increase of just 137,000 barrels per day for October. This figure is significantly lower than the previous hikes of 555,000 and 411,000 bpd in August and September. The reduced output signals continued supply restraint amid uncertain demand conditions.

Moreover, tensions escalated after attacks in Ukraine prompted the US to consider additional sanctions on Russian crude. President Trump warned of a second round of penalties and hinted at broader tariffs on countries purchasing Russian oil. These developments have raised fears of tighter supply and added a geopolitical premium to oil prices. Despite this, the broader technical picture for oil remains bearish and awaits fresh catalysts.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Consolidation

The daily chart for WTI crude oil shows that the price has been consolidating near the edge of an ascending channel pattern. A break below $62 may find strong support around the $60 area. However, a drop below $60 could trigger a deeper correction toward $55.50.

The price is also consolidating below the 50-day and 200-day SMAs, indicating a bearish trend. As long as it remains below the red dotted trendline, prices are likely to decline in the coming months. A breakout above the $77 level is needed to invalidate the current bearish setup in the oil market.

WTI Oil 4-Hour Chart – Negative Price Action

The 4-hour chart for WTI crude oil shows that the price has been trading below the $70 region and consolidating into a bearish pattern. The failure to break above $70 and $65.50 has kept oil prices within a downward trend, as shown by the red dotted trendline.

As long as the price remains below $65.50, further downside remains likely. However, the RSI indicates oversold conditions, suggesting a potential short-term rebound before another decline.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Resistance at 50-Day SMA

The daily chart for natural gas (NG) shows that the price has rebounded from the $2.70–$2.60 support zone and faced strong resistance near the $3.10 level. This resistance aligns with the 50-day SMA, and a daily close above $3.20 is needed to sustain the bullish momentum.

A break below $2.60 would trigger another decline, while a breakout above $3.60 would confirm a continued uptrend. The RSI has moved above the 50 level, indicating that natural gas is forming a short-term bullish price structure.

Natural Gas 4-Hour Chart – Rebound

The 4-hour chart for natural gas shows prices rebounding from the $2.60 support, with initial resistance near the $3.18 level. A breakout above $3.18 would confirm a bottom and could trigger a rally toward the $3.60 region.

Overall, natural gas has remained in a consolidation zone between $3.00 and $5.00 over the past year. A breakout above or below this range is needed to determine the next directional move.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Break from Bear Flag

The daily chart for the US Dollar Index shows that the index is breaking below the bear flag pattern and continues to move lower. This breakout from the bear flag indicates strong negative price action. As long as the index remains below 100.50, the next direction for the US Dollar Index is likely to be further downside.

US Dollar 4-Hour Chart – Negative Price Action

The 4-hour chart for the US Dollar Index shows strong consolidation between the 96.50 and 100.50 regions. However, this consolidation is forming a negative price structure as the index breaks below the 97.20 level. A break below 96.50 will confirm the bearish setup and could trigger a move toward the 90.00 level in the US Dollar Index.