Oil and Natural Gas Technical Analysis: Diverging Trends as Crude Stalls and Gas Rebounds

Oil prices dropped on Wednesday, hitting two-week lows as concerns over a global oil glut weighed on the market. Brent crude oil (BCO) settled at $63.52 per barrel, while WTI oil (CL) consolidated at $59.60. The decline followed U.S. data showing a larger-than-expected build in crude inventories, which increased by 5.2 million barrels to 421.2 million. The seasonal refinery maintenance and increased imports contributed to the build, signalling weaker short-term demand for crude oil.

Despite the inventory build, losses were limited by strong gasoline demand in the U.S. Gasoline inventories dropped sharply by 4.7 million barrels, suggesting healthy consumption even as prices declined. This drawdown supported refined product margins, indicating that underlying fuel demand remains robust. The market found a balance between bearish supply signals and bullish demand indicators, preventing a steeper price drop.

Moreover, additional downward pressure was exerted by global supply developments. Canada’s new budget hinted at lifting limits on oil and gas emissions, raising expectations of increased future output. At the same time, OPEC+ plans to increase production by 137,000 barrels per day in December, adding to concerns about potential oversupply. Overall, the market remains caught between rising global supply and resilient U.S. fuel demand, keeping oil prices volatile and the direction uncertain.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Negative Price Action

The daily chart for WTI crude oil shows that the price remains under pressure. It failed to break above the 50-day SMA and continues to move lower. A daily close below the $60 level indicates that the price is likely to fall further toward the $55 area. Moreover, the RSI remains below the midline, signalling additional downside potential in the short term.

WTI Oil 4-Hour Chart – Negative Price Action

The 4-hour chart for WTI crude oil shows that the price has continued to decline after consolidating below the $62 level. The RSI is also holding below the midline, indicating further downside in the short term. As long as WTI remains below the $63 level, the next move in oil prices is likely to be lower.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Bullish Momentum

The daily chart for natural gas shows that the price has found strong support in the long-term zone between $2.50 and $2.60 and has rebounded higher. This rebound has pushed prices toward the key resistance area between $4.50 and $5.00. The formation of a cup-and-handle pattern, followed by a successful retest of the $2.60 support level, suggests that natural gas prices are preparing for a continued rally in the coming weeks.

Natural Gas 4-Hour Chart – Bullish Momentum

The 4-hour chart for natural gas indicates that the price has broken above the key resistance zone between $3.50 and $3.60 and is continuing to move higher. The price structure above the long-term support at $2.60 remains strongly bullish, suggesting further upside potential. A breakout above the $4.70 level would likely trigger a new surge in natural gas prices.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – 200 Day SMA

The daily chart for the USD Index shows that it has reached strong resistance at 200 day SMA. After testing this resistance, the index has slowed down and started to move lower. The overall price trend for the USD Index remains bearish, and a break below the 96 level could trigger further downside. However, a breakout above 100.50 may signal renewed strength and open the way toward the 102 level.

US Dollar 4-Hour Chart – Negative Price Action

The 4-hour chart for the USD Index shows that it is consolidating between the 96 and 100 levels and has recently reached the upper boundary of resistance near 100.50. The index is now retracing lower after testing this resistance and is likely to find short-term support around 99.50. As long as the consolidation range between 96 and 100 holds, the next move in the USD Index remains uncertain.