Oil, Natural Gas, and US Dollar Technical Analysis: Volatility Builds Near Critical Price Levels

WTI crude oil (CL) prices fell to around $61.65 in early Asian trading on Thursday. The drop followed a surprise build in US oil inventories and a stronger US Dollar. The Energy Information Administration (EIA) reported a rise of 3.454 million barrels for the week ending May 9, as shown in the chart below. This contrasts sharply with the previous week’s draw of 2.032 million barrels and market expectations of a 1.0 million-barrel decline.

The unexpected inventory build raised concerns about oversupply. Investors are reacting to signs of weakening demand amid rising stockpiles. At the same time, OPEC+ is increasing exports, with May output expected to rise by 411,000 barrels per day. This surge in supply, alongside high US inventory levels, limits any bullish momentum in oil prices.

Meanwhile, easing global trade tensions have strengthened the US Dollar. The improved sentiment has reduced recession fears, pushing the Greenback higher. The stronger dollar makes crude more expensive for foreign buyers, adding further downward pressure on WTI prices. This rising supply, unexpected stock builds, and currency strength keep the oil market under pressure.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Rebound

The daily chart for WTI crude oil shows that the price has rebounded toward the long-term pivotal zone of $65–$66 following the US-China trade deal. This rebound from the $55 level has formed a double bottom pattern, which will confirm a bullish move if the $66 resistance is broken. The 50-day SMA is trending below the 200-day SMA, indicating negative price action. A break above the 200-day SMA at $70 would neutralise the downward trend.

WTI Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart for WTI crude oil shows short-term price action, with the price consolidating within a descending broadening wedge pattern. A break above $60 has pushed the price to the resistance level at $64, where the pattern reflects strong uncertainty due to heavy volatility. A break above the descending broadening wedge at $70 is required to initiate a sustained upward trend.

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 trading within a bullish structure and remains inside an ascending channel. A price correction from the $5 resistance found support at $3 and initiated a rebound higher. The RSI is also above the mid-level, indicating positive momentum. Natural gas prices will likely trade higher if the price remains above $3.

Natural Gas 4-Hour Chart – Constructive Rebound

The short-term price action is also bullish, as shown in the 4-hour chart below. The price has formed an inverted head and shoulders pattern and remains uptrend. A break above $3.80 could push prices toward $4.70. Moreover, the RSI is approaching overbought levels, indicating strong buying interest.

US Dollar (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index shows that the rebound from 98 was capped at the 50-day SMA, which triggered another drop toward the 100.65 level. This decline was driven by strong resistance at the 50-day SMA and bearish pressure from emerging patterns. The index must break below 100.65 to confirm another move lower. The US Dollar Index may consolidate within a range before the next leg down.

US Dollar 4-Hour Chart – Bearish Pressure

The 4-hour chart for the US Dollar Index shows that the index is trading within a descending channel and has hit resistance at 101.60. It dropped after reaching this resistance, but the decline was capped at the midline support of the descending channel. The index continues to consolidate around this region.