Energy Markets Pause as Oil Rally Cools and Natural Gas Finds Support

Key Moments

Market Overview

Oil prices retreated after a four-day advance, as evidence of growing supply countered the impact of elevated geopolitical risks that had recently lifted risk premiums. Data showed US crude inventories rising by 5.23 mn barrels over the past week, while gasoline and distillate stocks climbed by 8.23 mn and 4.34 mn barrels, respectively. These increases underscore near-term oversupply concerns.

Additional downside pressure on crude came from the resumption of oil exports, including shipments totaling approximately 3.6 million barrels. This development has helped ease earlier worries about restricted global supply.

Even so, broader geopolitical tensions continue to shape sentiment. While no major production centers have been affected, uncertainty is supporting higher price expectations, with some projections placing UK Brent near $70 per barrel over the next three months.

Against this backdrop, both oil and natural gas markets are navigating a tug-of-war between improving supply dynamics and a persistent geopolitical risk premium that is keeping volatility elevated.

Natural Gas Price Outlook

On the 2-hour chart, natural gas is trading near $3.38, consolidating after a pronounced decline from early January highs. Recent candlestick action shows repeated long lower wicks around the $3.30 area, indicating that buyers are actively defending this support zone.

Despite this stabilization, the price remains capped beneath a descending trendline that has been intact since December, maintaining a broadly bearish bias. Price action is currently contained within a narrowing triangle pattern, with resistance in the $3.43–$3.50 band and support around $3.12. Both the 50 and 200 moving averages sit overhead, restricting upside momentum.

The RSI is hovering near the 50 level, reflecting a neutral stance rather than a strong directional trend. A bullish engulfing signal has not emerged, suggesting that confirmation of a sustained upside move remains absent.

Within this framework, the trade idea centers on a breakout strategy: Buy above $3.45, with a stop placed below $3.30 and a target at $3.85.

WTI Crude Oil Price Outlook

On the 4-hour chart, WTI crude is trading near $60.75 following a sharp move through a descending trendline that had constrained prices through December. Recent candles display strong bullish bodies followed by smaller consolidation patterns, indicating that upside momentum is moderating rather than reversing.

Price has also broken above a rising wedge, turning the prior resistance area around $59.80–$60.00 into a new support zone. The broader structure remains within an ascending channel that has been in place since mid-December, with horizontal resistance around $61.50 and support near $58.70.

The RSI is holding close to 60, signaling steady upward momentum without entering overbought territory. No bearish engulfing signals are evident at this stage.

Within this configuration, the trading plan focuses on buying into a pullback near $59.80, placing a stop below $58.70 and targeting a move toward $61.50.

Brent Crude Oil Price Outlook

On the 4-hour chart, Brent crude is trading close to $65.07 after a robust rally into a key resistance area. The latest candlesticks feature large bullish bodies followed by smaller upper wicks, pointing to slowing buying pressure as prices approach a descending trendline that has been in place since October.

Brent is currently testing the $65.80–$66.00 supply zone, which coincides with the upper edge of a broad triangle pattern. Former resistance near $62.90 has turned into an important support level, with additional downside support located around $61.80 along a rising trendline.

The RSI is near 70, indicating stretched momentum but not yet signaling a definitive reversal. A clear bearish engulfing pattern has not been observed.

In this setup, the trade idea is to buy on a corrective move toward $63.00, with a stop placed below $61.80 and a target at $66.70.