Oil and Natural Gas Technical Analysis: Crude Faces Resistance While Gas Extends Rally

Oil prices held in a tight range as markets reacted to fresh supply threats. U.S. sanctions and drone attacks on Russian refineries raised concerns about refined fuel availability. These disruptions, along with U.S. refinery outages, lifted gasoline and diesel futures. Despite the rebound, gains in crude prices remained limited due to ongoing fears of a global supply surplus.

Moreover, Russian oil operations are under growing pressure. Ukrainian drone attacks halted production at Lukoil’s Volgograd refinery. On the other hand, the company also declared force majeure in Iraq, adding to market concerns. The approaching U.S. business cutoff deadline and the collapse of Lukoil’s asset sale to Gunvor further add to market risks. These developments threaten short-term refined product supply but have not yet significantly affected crude exports. Despite supply risks, oil remains vulnerable to downside pressure.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Consolidation

The daily chart for WTI crude oil shows that the price is consolidating below the $60 level, awaiting its next move. Despite Monday’s rebound, the broader trend remains bearish, with the price trading below the 50-day and 200-day SMAs.

Additionally, the RSI remains below the midline, signalling continued downside momentum. A breakout above $62.50 would suggest further upside toward the 200-day SMA near $65. However, a breakdown below the $59 region could open the door to further declines toward $55.50.

WTI Oil 4-Hour Chart – Negative Price Action

The 4-hour chart for WTI crude oil shows the price consolidating below the $62 level, reflecting market uncertainty. As long as it remains below $62.50, the bias for oil prices stays bearish.

A break below the $59 region would signal further downside. On the other hand, a breakout above $62.50 could pave the way for the $65.50 level. The RSI on the 4-hour chart also remains in negative territory, reinforcing the potential for further downside.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Bullish Momentum

The daily chart for natural gas (NG) shows that the price has broken above the $3.50 level, as indicated by the black trendline. The 50-day SMA is now crossing above the 200-day SMA near $3.50, signalling a bullish trend in natural gas prices.

A breakout above the $4.50 level would confirm further upside potential. However, a pullback toward the $3.50 level would offer a strong buying opportunity for the next leg higher.

The overall direction for natural gas remains bullish. However, the RSI indicates that prices have reached overbought territory, suggesting a potential short-term correction.

Natural Gas 4-Hour Chart – Positive Structure

The 4-hour chart for natural gas shows that the price has broken above the black dotted trendline, located around the $3.50–$3.60 level, and is moving toward $4.70. This breakout signals bullish price action in the short term.

A break above $4.70 would indicate further upside momentum. However, any correction in natural gas prices should be viewed as a buying opportunity for short-term traders.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – 200 Day SMA

The daily chart for the US Dollar Index shows that it has been consolidating below the 200-day SMA near the 100.50 level. As long as the index remains below this level, the trend remains negative.

A break above 100.50 could push the index toward the 102 level. However, a break below 98.20 may trigger a drop toward 96.50. The RSI has reached the 70 level, indicating that a short-term correction may be likely.

US Dollar 4-Hour Chart – Negative Price Action

The 4-hour chart for the U.S. Dollar Index shows that the index has been consolidating between the 96.50 and 100.50 levels. The index has reached the upper end of its range at 100.50. It may now consolidate further in the short term and potentially move lower toward the 98.60 support level. A break above 100.50 will take the index towards the 102 level.