Oil and Natural Gas Analysis: Supply Surge and Weak Demand Weigh on Prices

Oil prices face renewed selling pressure as global supply surges ahead of demand. The IEA raised its 2025 supply growth forecast to 2.5 million barrels per day and expects another 1.9 million bpd increase in 2026. OPEC+ has accelerated its easing of production cuts, and output from non-OPEC sources continues to rise. This expanding supply glut is overwhelming the market.

Moreover, the demand growth remains weak and continues to fall short of projections. The IEA now sees global oil demand rising by only 680,000 bpd in 2025 and 700,000 bpd in 2026. These figures are down from previous estimates. Depressed consumer confidence and slow economic activity in major economies are capping fuel demand. The IEA warns that a sharp rebound in demand looks unlikely in the near term.

Oil prices reacted sharply to the IEA’s report. Brent crude oil (BCO) fell below $66 per barrel while WTI crude oil (CL) dropped below $63, as markets digested the growing imbalance. Traders are now focused on oversupply risks and weak consumption trends. Unless demand strengthens or output is curbed, oil prices may stay under pressure.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Negative Price Action

The daily chart for WTI crude oil shows that the price has broken below the $64 level under bearish pressure and is looking to trade lower. The price is trading below the 50-day and 200-day SMAs, with the moving averages trending downward, highlighting the negative trend in WTI prices.

The nearest support lies in the $60 area, and a break below this level could take the price toward $55.50. However, a strong recovery above the $70 region would negate the negative trend and trigger a move toward the $75 area. A break above $75 is likely to push prices toward the $84 region.

WTI Oil 4-Hour Chart – Consolidation with Bearish Bias

The negative price action in WTI crude oil is also evident on the 4-hour chart, which shows the price breaking out of the consolidation zone near the $64 area. The nearest support levels are at $60 and $55.50.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Negative Price Action

The daily chart for natural gas (NG) shows that the price has approached the long-term support range, highlighted by the orange zone. The strong long-term support remains between $2.70 and $2.60, which is the neckline of the cup and handle pattern.

A rebound might develop from this support region. However, the 50-day SMA is trending downward, indicating the bearish pressure in natural gas prices.

Natural Gas 4-Hour Chart – Bullish Price Action

The 4-hour chart for natural gas shows that the price is breaking out of the trading range between the $2.90 and $4.70 region. However, the long-term support remains at the $2.60 to $2.70 level, where a strong rebound might develop.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index shows that it failed to break above 100.50 and has fallen below the 50-day SMA. The emergence of negative price action indicates that the index is likely to break below the 96 area. A break below the 96 area will likely initiate a substantial drop toward the 90 region. The RSI has also broken below the 50 mid-level, which reinforces the bearish momentum and signals further downside potential.

US Dollar 4-Hour Chart – Negative Price Action

The 4-hour chart for the US Dollar Index shows the formation of an ascending broadening wedge pattern, with the index breaking below the 97.80 level. A clear break from this region could take the index toward the 97 and 96 levels.