Oil Falls on Supply Concerns, Natural Gas Eyes Breakout, US Dollar Under Bearish Pressure

WTI crude oil (CL) remains under bearish pressure and enters the long-term support zone around $66. The price has fallen to its lowest since December 2021. An unexpected rise in crude oil stockpiles weighs it down. The Energy Information Administration (EIA) reported a 3.614 million barrel increase in inventories for the week ending February 28. This rise far exceeded the expected decline of 290,000 barrels. This surplus supply has added to the bearish sentiment in the oil market.

Moreover, OPEC+ has decided to move forward with its planned production increase in April, further pressuring oil prices. This marks the first production hike by the group since 2022, increasing concerns about oversupply. Traders had anticipated a more cautious approach from OPEC+ amid growing demand uncertainties. This decision and rising US stockpiles have strengthened the bearish outlook for WTI crude oil.

On the other hand, trade tensions also add to the downside risks for the oil market. The recent US tariffs on Canadian, Mexican, and Chinese goods raise fears of slower economic growth, which could dampen crude demand. Trump confirmed the tariffs would take effect on Tuesday, though automakers received a temporary exemption. The uncertainty surrounding these measures has created additional headwinds for WTI crude oil, as traders worry about reduced industrial activity and energy consumption.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Bearish Pressure

The daily chart for WTI crude oil shows that the price challenges the long-term support band. A break below this zone will likely sustain the downward trend. The break of $68 has disrupted the triangle pattern. The orange zone highlights the $63-$66 range as the long-term support zone.

However, the overall direction after the break of $68 remains bearish. However,  the RSI is approaching the oversold region, which indicates a rebound in the oil market from these levels.

Oil 4-Hour Chart – Bearish Pressure

The 4-hour chart for WTI crude shows the formation of a falling wedge pattern, with the price hitting the support of the pattern at $66. A break below this level will indicate further downside. However, a short-term rebound may develop due to the extremely oversold conditions on the 4-hour chart.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Bullish Momentum

The daily chart for natural gas shows the formation of a cup and handle pattern, with the price breaking the neckline at around $3. After this breakout, the price surged higher before correcting back to $3, initiating strong volatile moves above this level. The price remains above the 50-day SMA, indicating strong bullish momentum. The RSI has rebounded from the mid-level, coinciding with the price bouncing off the 50-day SMA, suggesting that the price may break higher.

Natural Gas 4-Hour Chart – Inverted Head & Shoulders

The 4-hour chart for natural gas shows that the price is trading within an ascending channel. It also forms an inverted pattern of head and shoulders. The orange zone highlights a key level. A break above $4.50 will open the door for a move toward the $5.10–$5.30 range.

US Dollar Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US dollar shows that the index has dropped below the 200-day SMA. It remains under bearish pressure below the key support of 105.20. The immediate support lies around 103.50. A break below this level could open the door for a move toward 100.65. The RSI is approaching the oversold region. A rebound from this level may provide temporary relief but keep the bearish trend intact.

US Dollar 4-Hour Chart – Bearish Pressure

The 4-hour chart for the US dollar index shows that it has broken the descending channel and is moving toward its lower boundary of the dotted trend line. This drop indicates strong bearish pressure, while the index appears extremely oversold on the 4-hour chart. A rebound from this level is likely.