Oil and Natural Gas Technical Analysis: Bearish Pressure on Oil, Bullish Setup in Gas

Oil prices consolidate on Tuesday after slight gains on Monday, as market focus shifts from Russian supply risks to growing concerns about a global surplus. Brent crude oil (BCO) dropped to $63.20, while WTI crude oil (CL) slipped to $58.71. This decline reflects investor hesitation, as geopolitical tensions are weighed against bearish supply forecasts.

Despite ongoing sanctions and no breakthrough in Ukraine-Russia peace talks, expectations for a 2026 oil surplus are weighing heavily on prices. However, the downside pressure is cushioned by hopes of a U.S. interest rate cut in December. Federal Reserve officials are signalling support for easing, which could boost economic activity and lift oil demand. This macro factor is helping limit losses and may temporarily support crude prices despite the bearish supply outlook.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Negative Trend

The daily chart for WTI crude oil shows strong bearish pressure below the 50-day and 200-day SMAs. The $60 level now acts as key short-term resistance, confirmed by the 50-day SMA. As long as the price stays below this level, WTI crude oil may continue to move lower. Additionally, the RSI is consolidating below the mid-level, adding to the downside pressure in the oil market.

This is also confirmed by the weekly chart, which shows long-term consolidation around the key $55 support area. A break below $55 would trigger strong selling pressure in the oil market. However, a breakout above $70 could signal further upside toward the $80 region.

WTI Oil 4-Hour Chart – Negative Price Action

The 4-hour chart for WTI crude shows strong consolidation below the $62 level, indicating persistent bearish pressure in the oil market. A breakout above $62 could trigger a strong rally toward the $65 area. However, a break below $55 would likely lead to renewed selling pressure.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Bullish Momentum

The daily chart for natural gas (NG) shows strong consolidation between the $4.30 and $4.70 levels, defined by the black dotted trendline. This range-bound movement increases the likelihood of an upside breakout above the $4.70 region.

A break above $4.70 could trigger a strong rally in natural gas prices, while a drop below $4.20 may lead to further downside, potentially reaching the $3.80 to $4.00 zone. Despite the consolidation, the overall price action remains bullish, and the probability of upward momentum is higher. Moreover, the 50-day SMA has crossed above the 200-day SMA, reinforcing the potential for continued upside in natural gas prices.

Natural Gas 4-Hour Chart – Bullish Momentum

The 4-hour chart for natural gas shows strong consolidation above the $4.10 level, with the price attempting to break above $4.70. A breakout above $4.70 would likely trigger another strong rally in natural gas prices. The emergence of multiple bullish patterns confirms strong upward momentum. A breakout from the black dotted trendline near $3.50 further increases the likelihood of continued upside.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Consolidation

The daily chart for the U.S. Dollar Index shows strong consolidation below the 100.50 level, increasing short-term uncertainty. A break above 100.50 would indicate further upside toward the 102 level. However, a break below 90.80 could lead to another decline in the index.

The 50-day SMA remains below the 200-day SMA. However, the 50-day SMA begins to rise towards the 200-day SMA, which adds to the short-term uncertainty. A break below 96.50 is needed to maintain bearish pressure on the dollar. If the dollar fails to drop near this level, the likelihood of upward momentum will increase.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart for the U.S. Dollar Index shows strong consolidation between the 96.50 and 100.50 levels since June 2025. A breakout above 100.50 could push the index toward the 102 level. However, a drop below 98 may lead to a decline toward the 96.50 support zone.