Oil and Natural Gas Technical Analysis: Diverging Signals in Crude and Gas Markets

Oil prices dropped on Thursday as investors watched US fuel demand near the end of the summer driving season. Brent crude oil (BCO) fell to $67, while WTI crude oil (CL) dropped to $63. This drop was developed after the price hit the intraday resistance area.

On the other hand, US crude inventories dropped by 2.4 million barrels last week, exceeding expectations. The drawdown reflected strong demand ahead of the Labour Day weekend.

Moreover, the geopolitical tensions also shaped market sentiment. Washington imposed tariffs of up to 50% on Indian imports, targeting its purchases of Russian crude. India is expected to maintain flows from Moscow in the near term, softening the immediate supply shock. However, traders remain alert to policy shifts that could tighten the global market.

Russia and Ukraine stepped up attacks on energy infrastructure, adding concerns about supply security. At the same time, hopes for a US interest rate cut lifted the demand outlook. With seasonal weakness, trade tensions, and geopolitical risks, WTI crude is trading near resistance at $64–$65, with support around $60.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Consolidation

The daily chart for WTI crude oil shows prices consolidating below the resistance near $65. Prices have failed to break above this level and continue to edge lower, though the support of the ascending channel is holding. As long as the $65 resistance remains intact, prices may drift toward the $60 region. Overall, crude oil is consolidating within the $60–$65 range during the summer season.

WTI Oil 4-Hour Chart – Consolidation

The 4-hour chart for WTI crude shows the price consolidating below resistance at $65. The consolidation range remains between $60 and $70, and a breakout above or below these levels will trigger the next move in WTI crude oil.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Rebound from Long-Term Support

The daily chart for natural gas (NG) shows that prices have touched the support level at $2.60 and are now starting a strong rebound toward $2.90. A daily close above the $3.00 region would trigger the next move toward the 50-day SMA near $3.20.

The support zone of $2.60 to $2.70 also aligns with the neckline of the cup-and-handle pattern, confirming it as a strong long-term base. Therefore, prices are expected to rebound toward higher levels from this region.

Natural Gas 4-Hour Chart – Rebound

The 4-hour chart for natural gas indicates strong support between $2.60 and $2.90. The price has consolidated within this range and then rebounded higher. As the price approaches the $2.90 level, a short-term upward continuation looks likely. The immediate resistance lies at the $3.20 and $3.60 levels, and a breakout above this zone could drive a strong move toward the $4.70 area.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index shows the formation of a clear bull flag pattern. The appearance of a head-and-shoulders setup, followed by a strong move below the 50-day SMA, signals that the index is attempting to break lower.

Additionally, the bearish hammer formed on Wednesday reinforces the downside bias following a period of consolidation. A break below the 97 level would push the index toward 96, while a drop under 96 could open the door to the 90 region.

US Dollar 4-Hour Chart – Negative Price Action

The 4-hour chart for the US Dollar Index shows bearish pressure building along the support line of an ascending broadening wedge pattern. This pressure suggests the next move in the index could be lower.

A break below the 97 level would likely take the index toward the 96 area. A confirmed breakout from this ascending broadening wedge would target initial support at 96.40. The level of 96.40 aligns with the beginning of the wedge pattern.