Oil and Natural Gas Technical Analysis: Key Support Holds as Rebound Signals Build

WTI crude oil (CL) started the week on a weaker note, falling nearly 1.5% to around $62.80. This decline occurred after the two-day rally that had pushed prices above $64. This correction in the oil prices comes from easing concerns over supply disruptions, which had previously supported the market.

Expectations of increased oil supply are growing as the US and Iran move closer to a potential nuclear deal. This prospect has weighed on crude prices as traders anticipate a higher supply in the near future.

Meanwhile, Russia’s temporary ceasefire in Ukraine has sparked optimism for reduced geopolitical tension, lowering the risk premium on oil prices. However, the weaker US dollar limits further losses in crude oil. Traders are now waiting for flash PMI data this week for more direction.

Investor sentiment remains cautious as the recession threat looms over the oil market. According to a Reuters poll, nearly half of market participants expect a US recession within the next 12 months due to tariffs and tightening financial conditions.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Consolidation

The daily chart for WTI crude oil shows that the price consolidates below the long-term support level of $66. However, the rebound from $55 was strong and has lifted the price to $63. The oversold market conditions drive this rebound. However, the trend remains downward as the price stays below the 50-day and 200-day SMAs.

WTI Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart for WTI crude oil shows that the price rebound from the descending broadening wedge pattern has formed a bullish structure, indicating a potential move to $67. The RSI has also rebounded from the mid-level, signaling positive price action.

Brent Oil (BCO) Technical Analysis

Brent Oil Daily Chart – Descending Broadening Wedge

The daily chart for Brent oil (BCO) shows that the price trades within a descending broadening wedge pattern, which has broken below the black dotted trendline. This breakout has pushed prices to lower levels. However, the rebound from $62 was driven by extremely oversold conditions, as per RSI. If the price fails to break above $70, the likelihood of a further drop will increase.

Brent Oil 4-Hour Chart – Inverted Head and Shoulders

The 4-hour chart for Brent oil shows that the price has rebounded from $59, forming an inverted head and shoulders pattern. However, Trump’s tariffs have induced volatility, keeping prices uncertain. The RSI is holding at the mid-level, indicating a short-term positive direction.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Level of $3

The daily chart for natural gas shows that the price has approached the key level of $3. Despite this strong support, the price has not shown any signs of a rebound. A rebound from this level is possible, but a break below $3 would indicate a further drop toward the $2.40 area. This key support is also aligned with the 200-day SMA, while the RSI has reached oversold levels, suggesting potential positive traction from this zone.

Natural Gas 4-Hour Chart – Ascending Channel

The 4-hour chart for natural gas shows that the price has broken below the ascending channel pattern and dropped to the key level of $3. The market appears oversold as it reaches this level, indicating a strong potential rebound. If prices bounce from here, the next target will be $3.60.