Oil, Natural Gas, and USD Outlook: Trade Talks & Geopolitical Tensions Drive Volatility

Oil and gas markets surged on Tuesday, driven by renewed optimism over US-China trade talks and rising geopolitical risks. WTI crude oil rebounded from $55 to $65.40, while Brent oil climbed to $67 per barrel—its highest since late April.

WTI Crude Oil: Poised for Breakout?

WTI is eyeing the key $66–$68 resistance zone after forming a double bottom near $55. A daily close above $68 (200-day SMA) could trigger a run toward $74, while failure to hold $60 may reverse the trend. On the 4-hour chart, WTI remains within a descending broadening wedge, with resistance at $70. A breakout here could drive prices to $73. RSI indicates overbought conditions, hinting at a short-term pullback.

Natural Gas: Bullish Structure Holds

Natural gas is consolidating above the critical $3 level, forming a bullish cup and handle pattern. A breakout above $3.80 may target $4.70 and higher. On the 4-hour chart, strong price action suggests growing momentum, as buyers defend the $3.00 floor.

Geopolitical Pressure: Iran and OPEC in Focus

While trade optimism lifts oil, geopolitical uncertainty weighs on sentiment. Iran’s counter-proposal on its nuclear deal could reintroduce more oil into global markets, pressuring prices. Meanwhile, modest output increases from OPEC+ signal a slow unwind of previous cuts, adding supply-side volatility.

US Dollar Index (DXY): At a Crossroads

The DXY is rebounding from key support at 98.00 after forming a bearish head and shoulders on the daily chart. A sustained move above 100.50 could shift sentiment bullish, but staying below the 50-day SMA keeps bearish momentum intact. The 4-hour chart shows consolidation within a descending channel, with resistance again at 100.50.

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Key Takeaways:

• Oil rebounded strongly; breakout levels at $68 and $70 critical for WTI.
• Natural Gas remains bullish; $3.80 and $4.70 are key upside targets.
• US Dollar weakness supports commodity prices, but rebound risks remain.
• Geopolitical headlines from Iran and OPEC could swing energy prices sharply.

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