Oil and Natural Gas Technical Analysis: Ceasefire and Inventory Data Shape Price Action

WTI crude oil (CL) rebounded on Wednesday after a sharp two-day decline. The price recovered above $65, gaining over 0.75%. The rebound followed oversold conditions after Monday and Tuesday’s steep drop, the worst since 2022. Additionally, traders responded to improved sentiment and fresh data showing a tightening supply.

The US Energy Information Administration reported a larger-than-expected drawdown in crude inventories. The chart below shows that stockpiles fell by 5.836 million barrels, far exceeding the forecasted decline of 0.6 million barrels. This marks the fifth consecutive weekly drop, indicating strong summer demand and tighter supply conditions. The data helped lift oil prices from recent lows.

Moreover, geopolitical tensions also eased slightly after the Iran-Israel ceasefire showed signs of stability. While early violations raised concerns, markets adopted a risk-on stance. However, the ceasefire remains fragile. Any new conflict could quickly restore the risk premium in oil. Traders remain alert to developments that could shift sentiment again.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Strong Volatility

The daily chart for WTI Crude Oil shows that the price dropped following the Iran-Israel ceasefire. The price closed below the 200-day SMA, signaling weakness. Currently, the price is consolidating between the 50-day and 200-day SMAs. The 50-day SMA remains below the 200-day SMA, indicating continued uncertainty.

Despite this, the price is holding within the orange zone, a long-term support area between $63 and $66. This zone has acted as a base during previous corrections. A break above $69 could pave the way for a move toward $75. Conversely, a drop below $62 may trigger further downside pressure.

WTI Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart for WTI Crude Oil shows that the price is trading within a descending broadening wedge pattern. The breakout from $70 reached resistance around the $77 area, aligning with the target of the pattern.

A break below $64 could trigger further downside, but price action remains uncertain amid ongoing geopolitical developments. Despite the ceasefire between Iran and Israel, the market remains cautious and awaits clear direction.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Level of $3

The daily chart for natural gas (NG) shows that the price remains bearish and has closed below the 50-day SMA. This bearish momentum is driving prices toward the $3.00 area. A break below $3.00 could trigger a move toward the $2.70 level. As long as the price holds above $2.70, the potential for an upside reversal remains in play for natural gas.

Natural Gas 4-Hour Chart – Consolidation

The 4-hour chart for natural gas shows that the price is consolidating between the $3.00 and $3.80 levels. A break of either level will trigger the next move in natural gas prices.

US Dollar (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index shows that it is dropping from the 50-day SMA and has broken below the 98 level. This breakdown has opened the door toward the 96 area. A further break below 96 could initiate a move toward the 90 level. The index is likely to remain under bearish pressure due to the emergence of technical bearish patterns.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that it is trading within a descending channel. The index failed to break above 100.50 and continues its downward trend.

This trend is likely to push the index toward the 95-96 zone, which serves as the support of the descending channel. A break below 95 would be bearish and could trigger continued momentum toward the 90 level.