Crude Oil and Natural Gas Technical Analysis: Rebound Potential as Key Support Levels Hold

Crude oil prices continue to rise from lower levels as the US imposed new sanctions on Chinese importers of Iranian oil. These sanctions target a China-based teapot refinery and aim to reduce Iran’s oil exports to zero. The move raised concerns about tighter global supply, pushing Brent crude oil (BCO) above $65 and WTI crude oil (CL) above $62. Both markets hit two-week highs.

Moreover, OPEC’s announcement of deeper cuts by Iraq and Kazakhstan added to the bullish momentum. These supply-side restrictions supported the rally. However, US crude stockpiles increased by 515,000 barrels, as shown in the chart below. Despite the inventory buildup, falling gasoline and distillate stocks signaled strong demand, helping prices maintain their gains.

However, demand concerns persist as global oil consumption growth is expected to slow since 2020. Trump’s tariff escalation on China, along with China’s retaliatory duties, has added pressure to the economic outlook. Federal Reserve Chair Powell warned that the trade war could slow growth and raise inflation, potentially limiting long-term oil demand.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Rebound

The daily chart for WTI crude oil shows that the price consolidates after a breakout from the long-term support and appears to be forming a base. Despite the rebound, the overall trend remains bearish as the price stays below the 50-day and 200-day SMAs, with the 50-day SMA trading below the 200-day SMA. This rebound is likely a result of oversold conditions, as indicated by the RSI.

Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart highlights strong volatility supporting the descending broadening wedge pattern, where the price attempts to rebound from the support zone. The RSI has broken above the mid-level of 50, signaling a potential recovery from this region.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Level of $3

The daily chart for natural gas shows that the price continues to correct toward $3 and has approached this key level. This support aligns with the 200-day SMA, where a potential rebound may occur. As the price nears the $3 level, the RSI also approaches the lower zone, where previous rebounds have occurred.

Natural Gas 4-Hour Chart – Ascending Channel

The 4-hour chart for natural gas shows that the price has broken below the ascending channel and is approaching the $3 support level. The daily chart also confirms that a rebound from the $3 level is likely.

US Dollar Technical Analysis

US Dollar Daily – Oversold Market

The daily chart for the US Dollar Index shows that the index is rebounding from lower levels but remains within a bearish trend. This rebound is likely due to oversold market conditions. The formation of a broader bearish pattern suggests that any move toward 100.65 and 103.50 may still be part of the overall downward trend in the US dollar.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the U.S. Dollar Index shows that the price is trading within a descending channel. It is rebounding from oversold conditions. The index has remained at this lower support range for the past four days. Therefore,  a rebound from this level is likely.