Oil and Natural Gas Analysis: OPEC+ Supply Risks Push WTI Lower, Gas Eyes Breakout

Oil prices extended their decline as traders reacted to expectations of an OPEC+ output increase. Brent crude oil (BCO) dropped to $67 per barrel, while WTI crude oil (CL) dropped to $63.50. The weakness highlights growing concern that a higher supply could weigh on the market in the short term. Investors are cautious ahead of the weekend meeting, where producers may raise targets again.

The possibility of OPEC+ adding more barrels comes after months of steady supply increases. The group already boosted output by 2.2 million barrels per day from April to September. Despite this, Middle Eastern oil prices stayed firm, giving key members confidence to push production higher. If OPEC+ raises quotas further, it could further increase the pressure on prices as markets adjust to growing supply.

Meanwhile, US data added to the bearish tone. Crude inventories rose by 622,000 barrels, as seen in the chart below. The unexpected build signals weaker demand and slower refinery activity. The data reinforces downside momentum in oil markets, combined with OPEC+ supply risks. Crude prices may remain under pressure until traders see clearer signals on demand recovery and OPEC+ policy.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Bearish Pressure

The daily chart for WTI crude oil shows that the price failed to break above the 50-day SMA and continues to move lower. A break below $60 would extend the bearish momentum toward the $55.50 level.

Since the 50-day SMA remains below the 200-day SMA and consolidation continues under the $70 region, bearish pressure is building. This price action indicates that the next move in WTI remains to the downside.

WTI Oil 4-Hour Chart – Consolidation

The 4-hour chart for WTI crude oil shows that the price failed to break above the $65.50 level and continues to move lower. The consolidation over the past year is fueling a negative bias and indicates that the next move in WTI crude oil will likely be to the downside.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Rebound from Long-Term Support

The daily chart for natural gas (NG) shows that the price has found strong support in the $2.60 to $2.70 region. The rebound from this level has reached the resistance of the 50-day SMA, indicating that the next move in natural gas prices is pending.

A break above $3.16 would extend the upside toward $3.60. Furthermore, a breakout above $3.60 could trigger a move toward the $5.00 level. The cup-and-handle pattern, along with the rebound from its neckline, suggests that natural gas is building bullish price action and is likely to move higher in the near term.

Natural Gas 4-Hour Chart – Rebound

The 4-hour chart for natural gas shows strong consolidation between the $2.60 and $4.70 levels. Prices are approaching the $3.18 region, and a break above this level would continue the rebound toward $3.60.

Natural gas has remained in a consolidation zone for the past few months, which makes the next move uncertain. However, the bullish price action on the daily chart suggests that natural gas prices are likely to continue rising in the coming months.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Bear Flag

The daily chart for the US dollar index shows that the index is consolidating at the support of a bear flag pattern, indicating that bearish pressure is increasing near the 97 level. A break below 97 would complete the bear flag pattern and initiate a strong drop toward 96.

The RSI is also fluctuating around the midline, reflecting price uncertainty and a lack of clear direction. The release of non-farm payrolls data on Friday will be the key driver for the next move in the US dollar index.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart for the US dollar index shows that prices are consolidating between the 97.20 and 98.60 levels. Consolidation below 98.60 increases short-term uncertainty.

A breakout above 99.20 is required for a move toward the 100.50 level. However, as long as the index remains below 100.50, the next move in the US dollar index is likely to be lower.