Oil and Natural Gas Technical Analysis: Key Breakout Levels to Watch as Volatility Builds

Oil prices dropped sharply as OPEC+ agreed to increase output by 547,000 barrels per day in September. This decision raised fresh concerns about global oversupply, especially after weak US gasoline demand data. Brent crude oil (BCO) settled at $68.76 and WTI crude oil (CL) at $66.19, both at their lowest levels in a week.

Traders reacted to US data showing record oil production and sluggish demand during peak driving season. These signs of weak consumption in the top oil-consuming nation added bearish pressure. The market now braces for the possibility that OPEC+ may unwind an additional 1.65 million barrels per day in their next meeting.

Moreover, geopolitical tensions added complexity. Trump threatened steep tariffs on Russian oil buyers, including India. While this risk limited the decline, uncertainty around potential US sanctions keeps the market on edge.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Consolidation

The daily chart for WTI crude oil shows that the price has been consolidating within the long-term support range of the $64 to $66 area. These consolidations remain contained within a triangle pattern formed by the red dotted trendline. A break above $77 would signal a bullish breakout and could push oil prices toward the $84 region. However, a break below $64 would indicate further downside, with potential declines toward the $60 and $55 levels.

WTI Oil 4-Hour Chart – Consolidation

The 4-hour chart for WTI crude oil shows that the price has been consolidating within the $64 to $66 area, as highlighted by the orange zone. The formation of a double top suggests bearish price action, while a previous double bottom near the $55 area indicates a bullish setup. These opposing bullish and bearish patterns have caused the price to remain in a tight consolidation range. A breakout from either side of this range will likely determine the next directional move in oil prices.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Support Region

The daily chart for natural gas (NG) shows that the price is approaching the long-term support zone between $3.00 and $2.90. A break below this level could drive prices toward the $2.70 region. The orange highlighted area, which spans from $3.00 to $2.70, marks a key support range where a potential rebound in natural gas prices may occur.

Natural Gas 4-Hour Chart – Consolidation

The 4-hour chart for natural gas shows that the price is consolidating between the $2.90 and $4.70 range. However, the long-term support between $2.70 and $3.00 is likely to trigger a potential rebound. The RSI suggests that prices may continue to fall despite the strong support at $2.90. Any rebound from the $2.70–$3.00 zone could push natural gas prices higher.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Resistance of 100.50

The daily chart for the US Dollar Index shows that it initiated a rebound after breaking above the 50-day SMA. This breakout pushed the index toward the 100.50 level. However, it failed to break above that resistance and dropped sharply following the release of US employment data. A breakout above 100.50 would signal further upside, while a break below the 96 level would indicate a bearish reversal.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart for the US Dollar Index shows that it failed to break above the 100.50 resistance and has broken below the red dotted trendline. The weekly close below this trendline has introduced short-term uncertainty. However, the overall trend in the US Dollar Index remains negative.