Oil, Natural Gas and US Dollar Analysis: Geopolitical Tensions and Fed Policy in Focus

WTI crude oil (CL) trades near the $69 area, its highest level in nearly two months. Rising tensions in the Middle East have contributed to the surge in prices. The US plans to partially evacuate its embassy in Iraq, and President Trump’s warning about Iran’s nuclear ambitions adds to the geopolitical risk premium.

The chart below shows that the EIA reported a decline of 3.644 million barrels in US crude oil inventories for the week ending June 6. This drop contrasts with market expectations of a 100,000-barrel increase. Although smaller than the previous week’s 4.304 million-barrel decline, the drawdown still supports bullish sentiment in the oil market.

However, uncertainty surrounding US-China trade relations continues to weigh on the outlook. President Trump declared that the trade deal with China is ‘done,’ but no confirmation has come from Beijing. If trade tensions escalate or economic risks from tariffs increase, oil demand expectations may weaken, limiting further upside in WTI prices.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Resistance of 200-Day SMA

The daily chart for WTI crude oil shows that the price has broken above $66 and reached strong resistance at $69, near the 200-day SMA. After hitting this resistance, the price began correcting lower. The next support lies in the $66 area.

A break above $69 would likely trigger a move toward the $72.50 level. Moreover, a break above $72.50 could push prices toward $73.50, which marks the resistance of the triangle formed by the red-dotted trendlines. However, as long as the price remains below $69, the price may correct towards $66. The negative trend is likely to continue unless a confirmed breakout above $73.50 occurs.

WTI Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart for WTI crude oil shows that the price remains within a descending broadening wedge pattern. The constructive rebound from the $55.80 area has pushed the price toward the $69 resistance level.

A break above $69 could lead the price toward the $72–$73 area, as marked by the black dotted trendline. However, the RSI indicates that the market is extremely overbought and may be due for a correction. Strong support remains in the $67 and $64 areas.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Level of $3

The daily chart for natural gas (NG) shows that the price is consolidating above the $3 area and building positive momentum. The consolidation between the $3 and $4 region indicates price uncertainty. Therefore, a break above $4 is required for further upside toward the $5 area. As long as the price remains above the 50-day and 200-day SMAs, the bullish momentum is likely to continue.

Natural Gas 4-Hour Chart – Consolidation

The 4-hour chart for natural gas shows that the price is consolidating between the $3.00 and $4.70 area. A break above the $3.80 level is required to trigger further upside momentum toward the $4.70 area.

US Dollar (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index shows that the index is trading within a bearish price structure. It has formed a bearish head and shoulders pattern and continues to break below the long-term support at the 98 area.

A break below 98 could trigger a move toward the 96 region. Moreover, a break below 96 may initiate a long-term decline toward the 90 area. Based on the long-term bearish structure, the index is likely to continue moving downward.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that the index is trading within a descending channel. The rebound from 98.30 was capped at the channel’s resistance and continued lower. As long as the index remains below 100.50, bearish pressure is likely to persist. The next strong support lies in the 96 areas, and a break below 96 would likely initiate further downward momentum.