Oil and Natural Gas Technical Analysis: US Sanctions Fuel Price Rallies Amid Strong Demand

Oil prices rallied after the U.S. imposed new sanctions on Russia’s largest oil companies, Lukoil and Rosneft. The sanctions aim to cut off funding for Russia’s war effort in Ukraine, triggering immediate supply concerns. Brent oil (BCO) and WTI oil (CL) jumped sharply after the announcement, reflecting heightened geopolitical tension and fears of restricted global supply.

Moreover, additional support came from strong U.S. demand data. The Energy Information Administration reported a significant drop in crude, gasoline, and distillate inventories, indicating robust refining activity. Meanwhile, global demand also remains strong, further reinforcing bullish sentiment in the oil market.

Furthermore, positive developments in U.S.-China and U.S.-India trade talks have raised expectations for rising demand outside of Russia. India signalled it may reduce Russian oil imports, potentially shifting demand toward alternative suppliers.

The Trump-Putin summit has been delayed, and diplomatic pressure is mounting on Asian buyers. As a result, market participants are increasingly pricing in tighter global supply conditions in the coming weeks.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Rebound

The daily chart for WTI Crude Oil shows that the price has bounced from long-term support. It has since moved up and reached the $60 area. A breakout above this level could push prices toward the next resistance zone around $62–$64. However, as long as the price stays below the $66 region, WTI remains in a broad consolidation phase with limited upside momentum.

The strong rebound in WTI crude oil is clearly visible on the weekly chart. The chart highlights a key long-term support zone near the $55 region. Immediate resistance stands around the $66 area. A breakout above this level could push prices toward the long-term resistance near $75. Conversely, a break below $55 would signal renewed downside pressure and potentially trigger a deeper selloff in the oil market.

WTI Oil 4-Hour Chart – Descending Channel

The 4-hour chart for WTI Crude Oil shows that the price has rebounded from the $55 region and broken out of the descending channel pattern. This breakout suggests that the price may move toward the $62 resistance area. A clear break above $62 could push the price further toward the $65.50 level.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Resistance at 200-Day SMA

The daily chart for natural gas (NG) shows that the price is consolidating between the 50-day and 200-day SMAs. It remains confined within an ascending broadening wedge pattern. A break above $3.50 could push the price toward the $3.80 resistance level. Moreover, a breakout above $3.80 would signal a bullish move, potentially driving the price toward the $5 region.

Natural Gas 4-Hour Chart – Rebound

The 4-hour chart for natural gas shows that the price is currently consolidating below the 3.50 level. If the price breaks above the 3.50–3.60 range, then it would breach the black dotted trend line and could initiate a move toward the 4.70 level.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Consolidation

The daily chart for the US Dollar Index shows strong consolidation below the long-term resistance near the 100.50 level. Currently, this range-bound movement remains confined between the 96 and 100 zones. Ultimately, a break of this range will define the next move in the US Dollar Index.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart for the US Dollar Index shows strong consolidation between the 98.60 and 99.20 levels in the short term. A breakout above 99.20 could push the index toward the 100.50 level. However, a clear break beyond the 96.00–100.00 range is needed to confirm the next major move.