Oil and Natural Gas Technical Analysis: Downside Risks Loom as Consolidation Continues

Crude oil prices remained under pressure on Tuesday, as WTI crude oil (CL) continued to trade below $65 per barrel, while Brent crude oil (BCO)  traded below $70. Despite a developing situation in the UK, market momentum stayed weak. Traders showed little reaction to reports that Prax Group, the owner of Lindsey Oil Refinery, had filed for insolvency.

The refinery’s potential shutdown threatens the refined fuel supply in Northwest Europe. Although the facility primarily processes Brent-linked crude, any disruption could impact the availability of diesel and gasoline. However, the oil market remained focused on global supply dynamics, particularly from OPEC+.

OPEC+ is expected to approve another 411,000 barrels per day increase in August. This would push the year’s total production rise to 1.8 million barrels per day. Meanwhile, easing geopolitical tensions, including the Israel-Iran ceasefire, reduced the risk premium in oil prices. These factors combined to keep crude oil in a narrow range, with bearish sentiment prevailing.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Strong Bearish Pressure

The daily chart for WTI crude oil shows that the price failed to hold above $77 following the Iran-Israel ceasefire. The price has dropped below $66 and continues to face bearish pressure. A break below the 50-day SMA near the $64 level could trigger further declines. As long as the price remains below the 200-day SMA, it is likely to continue declining.

WTI Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart for WTI crude oil shows that the price formed a double top near the $75 to $77 resistance area. After completing the pattern, the price broke below the $67 support and is now consolidating within the $64-$67 range. A break below $64 would likely initiate further downside in WTI crude oil.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Level of $3

The daily chart for natural gas (NG) indicates that the price is consolidating within the $3 to $4 range. A break below $3.30, near the 200-day SMA, could trigger further downside in natural gas prices. Additionally, a drop below $2.70 would invalidate the bullish trend and signal deeper losses.

Natural Gas 4-Hour Chart – Consolidation

The 4-hour chart for natural gas indicates that the price is consolidating within the $3.00 to $4.70 range. The consolidation during April, May, and June reflects strong price uncertainty and market indecision. A break below $3.00 would signal further downside, while a break above $4.70 would indicate a potential bullish breakout.

Brent Oil (BCO) Technical Analysis

Brent Oil Daily Chart – Bearish Pressure

The daily chart for Brent Crude Oil shows that the price has encountered strong resistance at the $80.00 level. This area, marked by a circle on the chart, aligns with a black trendline that has served as a key level of resistance. After hitting this level, the price resumed its bearish trend and broke below the 200-day SMA. It is now consolidating near the $67 support level. A break below $67 would signal further downside in Brent Crude Oil.

Brent Oil 4-Hour Chart – Consolidation

The 4-hour chart for Brent Crude Oil shows that the drop from $80 has brought the price into the orange zone. The price is now consolidating within this zone and is awaiting its next directional move.