WTI Crude Oil Faces Selling Pressure as Natural Gas Rebounds from Key Support

WTI crude oil (CL) prices consolidate below $65 as concerns over the US-China trade war weigh heavily on market sentiment. Investors fear that the ongoing conflict between the two largest economies could significantly reduce global fuel demand. Recent data show that oil demand growth forecasts could drop by 500,000 barrels per day if tensions escalate. As a result, buyers remain cautious and limit upside movement in WTI crude oil.

Moreover, OPEC+ plans to increase oil output for a second consecutive month, which will add to bearish pressure. Starting in June, the supply is expected to rise by 400,000 to 500,000 barrels per day. This expected boost in supply comes at a time when the demand outlook remains uncertain. Additionally, progress on the US-Iran nuclear deal raises the possibility of another 1 million barrels per day entering the market.

Despite a weak US Dollar supporting commodity prices, oil struggles to find buyers. WTI has already fallen from its recent high of $64.70, and the market indicates a risk of a breakdown below the $61.00 support area if bearish momentum persists. Key economic data will further impact the oil market. China’s PMI readings and US Nonfarm Payrolls (NFP) will provide fresh signals for global economic health. Weak numbers could reinforce fears of a slowdown and push WTI below the $55 level.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Pivotal Zone

The daily chart for WTI crude oil indicates that the price remains under bearish pressure, as it has failed to break above $67. The price band of $66–$67 remains the long-term pivotal area, where a failure to break above this range could indicate a further decline in oil prices. Moreover, the RSI is approaching the mid-level after rebounding from oversold conditions, suggesting that the price may face resistance here and continue to decline.

WTI Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart for WTI crude oil shows strong volatility within a descending broadening wedge pattern. However, the rebound from the wedge support failed to break above the black dotted trendline. The ongoing consolidation below this trendline increases the likelihood of a further price drop.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Support Level of $3

The daily chart for natural gas (NG) indicates that the price has found support around $3, where the RSI has also reached the oversold level. After testing the $3 support, the price rebounds. This rebound has the potential to reach $5 if $3.60 is broken. The support region at $3 is significant and aligns with the 200-day SMA.

Natural Gas 4-Hour Chart – Ascending Channel

The 4-hour chart for natural gas shows that the price has rebounded from the $3 support level, which was also considered an oversold area. The breakdown from the ascending channel, followed by a strong rebound at $3, indicates the possibility of a bottom forming in this region.

US Dollar (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index indicates that it is consolidating below the 100 level and has thus far failed to break above it. The market is waiting for the US Core PCE inflation and NFP data to gain further direction. However, the trend in the US Dollar remains strongly bearish, and the index looks likely to drop lower.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that the index is trading within a descending channel and remains under bearish pressure. Strong resistance levels are seen at 101.40 and 102.90, and a failure to break above these levels will likely continue to push the index lower.