Oil, Natural Gas, and US Dollar Technical Analysis: Seasonal Demand and Supply Concerns

WTI crude oil (CL) has hit resistance at the 50 SMA and continues to trend lower. Liquidity may be reduced during Thanksgiving, increasing the likelihood of price swings. OPEC+ has announced that its 1 December oil policy meeting will be online. During the meeting, members are expected to discuss delaying planned increases in oil production. According to sources within the group, this consideration arises in response to weak global oil demand. If OPEC+ agrees to postpone output hikes, it could support oil prices by tightening supply in the market. This decision will be critical, as it may significantly impact the balance between supply and demand in an already uncertain global energy market. Additionally, geopolitical tensions involving major producers like Russia and Iran heighten supply risks, while rising demand from China and India continues to support prices.

Moreover, the strength of the US dollar puts pressure on oil prices by increasing the cost of crude for holders of other currencies. Recent developments, including a strong US labour market and escalating geopolitical tensions, have bolstered the US dollar. The upcoming release of PCE inflation data on Wednesday will likely influence the dollar’s trajectory. A weaker dollar could temporarily relieve oil prices, while continued strength may keep them under pressure.

On the other hand, natural gas (NG) markets are influenced by rising winter demand and geopolitical concerns. Escalating European tensions, particularly involving Russian supplies, continue to support prices. Cold weather forecasts are driving increased consumption in the US, while LNG exports to Europe remain robust. Due on Wednesday, the Baker Hughes gas rig count will provide insights into domestic trends. Despite potential price fluctuations, natural gas demand is expected to remain strong throughout winter, maintaining a bullish outlook.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Bearish Pressure

The daily chart for WTI oil shows that the price forms bearish patterns and trades within triangle formations. The price has reversed lower from the resistance at $71, aligned with the black dotted trend line. Strong support lies within the $66–$67 zone. The 50 SMA is trending downward, indicating a short-term bearish trend, while the 200 SMA remains flat, signalling price consolidation. However, a break below $66 could continue the downward trend for oil prices.

Oil 4-Hour Chart – Triangle Pattern

The 4-hour chart also reveals a triangle pattern formation, indicating bearish pressure. The price has started to move lower from the resistance of this triangle. The RSI is below the midpoint, suggesting that oil prices will likely continue downward in the short term.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Cup and Handle

The daily natural gas chart shows the formation of a cup-and-handle pattern. The price has reached strong resistance, around $3.60, and is consolidating. A break above $3.60 could trigger a strong upward move in the natural gas market. The 50 SMA is also above the 200 SMA, indicating a bullish trend.

Natural Gas 4-Hour Chart –Ascending Channel

The 4-hour chart shows the formation of an ascending channel, with the price trading within its boundaries. The RSI has rebounded from the midpoint, indicating a bullish trend. A break above $3.60 could lead to a parabolic move in price. However, $2.50 remains a strong support level.

US Dollar Technical Analysis

US Dollar Daily – Breakout from 107

The daily chart for the US Dollar Index shows that the price fluctuates within a wide range near the strong resistance at the 107 level. Despite these fluctuations, the price demonstrates strength as each drop is reversed higher. The immediate resistance after a breakout is in the 108.70 to 109 zone. On the other hand, 105.60 remains a strong support level. The RSI is overbought, suggesting a potential price correction. However, if prices continue to close above 107 daily, the likelihood of sustained upward momentum will increase.

US Dollar 4-Hour Chart – Ascending Channel

The 4-hour chart for the US Dollar Index shows that the price is trading within an ascending channel. The index is approaching the channel’s resistance of around 108.70, and a break above this level could sustain the US dollar’s upward momentum. With the 1-year trading range for the US dollar index having broken at 107, the upward move may gain additional strength. The upcoming US PCE data on Wednesday is expected to provide further insights and direction.