Crude Oil and Natural Gas Technical Analysis – Critical Support and Resistance Zones

WTI crude oil (CL) prices rebound from the support levels to around $63 per barrel. This price increase comes after hitting a four-year low. However, prices remain below the breakeven points for many US producers. According to the Dallas Fed, drillers need around $65 to profitably start a new well. Rystad Energy estimates that producers require at least $62 to cover debts and dividends.

Despite this short-term increase, the prices remain under bearish pressure below the long-term support area. The breakdown from the long-term support reflects fears of weakening global demand. The trade war between the US and China has intensified, with a 104% tariff now imposed on Chinese imports. China, the world’s top oil consumer, could see demand growth of 50,000 to 100,000 barrels per day at risk.

Moreover, pressure comes from supply-side developments. OPEC+ plans to increase production by 411,000 barrels per day in May, raising concerns of a market surplus. Meanwhile, US crude inventories dropped by 1.057 million barrels last week, but this was not enough to counteract the previous 6.037 million barrel build.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Bullish Hammer

The daily chart for WTI crude oil shows that the price broke out of the triangle pattern and hit $55.15. However, this drop was reversed, forming a bullish hammer candle on Wednesday. Despite the reversal, the price failed to close above $66, which keeps bearish pressure intact. The immediate resistance for WTI crude oil is between $65 and $66, and a weekly close above this range is needed to negate the bearish outlook.

Oil 4-Hour Chart – Volatility

The 4-hour chart shows that the price has reached the support zone of the falling wedge pattern around the $55 area, where it remains volatile. The strong rebound from this level is due to extremely oversold conditions observed in the RSI. The immediate resistance for this rebound remains in the $65 to $67 area.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Bullish Hammer at Support

The daily chart for natural gas shows that the price is trading within an ascending channel after forming a cup-and-handle pattern. The price reversed from the channel’s support and formed a bullish hammer. The appearance of the bullish hammer within the $3 to $3.60 support zone suggests that the price may remain strong.

Natural Gas 4-Hour Chart – Ascending Channel

The 4-hour chart for natural gas shows that the price briefly breached the ascending channel but quickly rebounded to close back within it. The RSI also recovered above the mid-level as the price moved back into the channel, highlighting ongoing market strength.

US Dollar Technical Analysis

US Dollar Daily – Bearish Pressure below Resistance

The daily chart for the U.S. Dollar Index shows that it is trading below 103.50 and remains volatile. The consolidation under 103.50 indicates bearish pressure and suggests the possibility of further declines. A breakout below 103.50 has opened the door for a move toward 100.65.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the U.S. Dollar Index further confirms the bearish trend through a descending channel. The index remains within this channel and shows continued bearish momentum. The RSI stays below the mid-level, indicating a possible further decline. As long as the index remains below 105.20, it is likely to continue moving lower.