Oil and Natural Gas Analysis: Tariff Threats and Supply Risks Drive Market Sentiment

Oil prices increased for the fourth straight day as traders reacted to geopolitical tensions and tariff threats. Brent crude oil (BCO) increased to $73.50 per barrel while WTI crude oil (CL) increased to $70.35. Traders expect a tighter supply if secondary tariffs on Russian crude buyers take effect.

Trump intensified pressure on Russia, warning of 100% tariffs on its trade partners if no progress is made on Ukraine within 10–12 days. He also announced a 25% tariff on Indian imports starting Friday. Meanwhile, the US warned China that it could face steep tariffs if it continues its purchases from Russia. In addition, new sanctions targeted over 115 Iran-linked entities, as China remains a major buyer of Iranian oil. These actions have heightened concerns over a tighter global oil supply.

Despite rising prices, US crude inventories rose by 7.7 million barrels. This increment was highest in the six months.

On the other hand, gasoline stocks fell sharply by 2.7 million barrels to 228.4 million, far surpassing the expected 600,000-barrel draw. The large crude build added pressure, but strong gasoline demand balanced the outlook, creating a neutral impact on the oil market in the near term.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Double Bottom Pattern

The daily chart for WTI crude oil shows that the price has formed a double bottom at the long-term support near the $64 region and has initiated a strong rebound. The price has broken above the 200-day SMA and is showing potential for further upside. Strong resistance lies near the $75 area, and a breakout above this level could trigger a rally toward the $80 region.

Despite this rally, the 50-day SMA remains below the 200-day SMA. However, if WTI crude oil breaks above the $75 resistance, the 50-day SMA may start to recover and cross above the 200-day SMA, signalling a stronger bullish trend.

WTI Oil 4-Hour Chart – Bullish Development

The 4-hour chart for WTI crude oil shows that prices have formed a double bottom near the $64 area and have broken above the $69 region. Additionally, the formation of a strong bottom pattern around the $55 level suggests that WTI prices may continue to rally.

For the rally to gain momentum, prices must break above the key resistance at $75, which would likely trigger strong bullish momentum. However, the RSI indicates short-term overbought conditions, so any pullback in WTI crude oil is likely to be viewed as a temporary correction within a broader rebound.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Consolidation

The daily chart for natural gas (NG) shows a strong bullish price structure, forming a classic cup and handle pattern. However, the price failed to break above the $4.70 resistance and has since entered a correction phase. Currently, natural gas prices are approaching long-term support between the $2.70 and $3.00 region.

As long as prices remain above the $2.70 level, the bullish outlook remains intact. A sustained break below this zone may weaken the trend, but above it, prices are likely to rebound. For natural gas to gain strong long-term momentum, a breakout above the $5.00 resistance is needed.

Natural Gas 4-Hour Chart – Consolidation

The 4-hour chart for natural gas shows that prices are consolidating between the $2.90 and $4.70 range. Despite the ongoing consolidation, the overall price action remains constructive. However, the current section of the chart is showing bearish signs. A break below $2.90 would be negative for natural gas prices and could trigger further downside. Conversely, a breakout above $4.70 would be a bullish signal, indicating potential for additional upside.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Break of 50-Day SMA

The daily chart for the US Dollar Index shows that the index has broken above the 50-day SMA, initiating a strong rally. It has also moved above the key resistance level at 99.65. The immediate resistance now lies at 100.50. The index is showing strong bullish price action, supported by recent US–EU trade deals. These trade agreements are likely to have a positive impact on the US dollar and could help sustain the ongoing rally.

US Dollar 4-Hour Chart – Short-Term Strength.

The 4-hour chart for the US Dollar Index shows the formation of a bottoming pattern, specifically an inverted head and shoulders. The index has broken above the immediate resistance at 99.50 and is now approaching the 100.50 level. A breakout above 100.50 could push the US Dollar Index toward the 102 level. If the index breaks above 102, it would confirm a bullish trend and signal further upside potential.