WTI crude slides to $70.45 as supply surge outweighs truce stability

Robust US production and steady OPEC+ adherence have kept global oil markets broadly balanced, yet WTI crude's breakdown below a key $85.75 triangle pattern has accelerated selling pressure, dragging prices to $70.45.

"WTI's violation of the triangle support zone near $85.75 confirms a continuation of the downtrend established from the $116 high, with the next leg targeting the $63.01 to $56.12 Fibonacci extension," said Omar Tariq, energy markets analyst at Edgen. "The failed fair-value region between $78 and $85 is now firmly in sellers' hands, and any recovery attempts will face resistance from the downward-sloping trendline."

WTI crude traded at $70.45 on the 4-hour chart after large bearish engulfing candles broke below the triangle support, with the relative strength index sliding below 40, pointing to strong sellside momentum. Brent crude held relatively steadier at $74.12 on the 2-hour chart, with its RSI near 50 reflecting an indecisive market, while a downtrend channel near $73.18 has kept the benchmark contained. Natural Gas diverged from the oil complex, trading at $3.286 on the 2-hour NYMEX chart within a well-defined ascending channel, with bullish rejection wicks below the $3.099 swing low keeping buyers in control and the RSI at 52.

The divergence between oil and gas markets underscores a shifting energy landscape: while crude faces headwinds from sustained US production — with near-minimal operational inventories in major hubs and refinery runs remaining high — natural gas is benefiting from record-breaking output supported by associated volumes and strong LNG export activity. Stockpiles continue to replenish during the summer building season, with working gas well above the five-year average, suggesting a comfortably supplied market that can accommodate both domestic demand and robust exports. The truce, now more than one month old, has removed a layer of geopolitical risk premium from crude prices, leaving supply-demand fundamentals as the primary price driver.

WTI's Breakdown Deepens as Sellers Dominate

The downtrend in WTI crude has been building since the $116 swing high, with a series of declining highs and a downward-sloping trendline serving as resistance for recovery attempts. The price is now falling toward the $63.01 to $56.12 Fibonacci extension zone, with the volume profile pointing to the $78 to $85 range as a failed fair-value region now controlled by sellers. A lower high and lower low structure continues to favor sellers on any bounce attempts. The last time WTI traded near $70 was during the initial truce negotiations, and a break below that psychological level could accelerate selling toward the $63 support zone.

Natural Gas Holds Its Ground Amid Broader Energy Rout

Natural Gas has maintained its uptrend structure, with a higher high and higher low pattern favoring buyers on pullbacks. The volume profile identifies $3.12 as a solid pivot support, while Fibonacci extensions point to a target range of $3.247 to $3.330. The RSI around 52 supports a bullish bias, and mixed candles have kept above the 50-period moving average near $3.18. The broader supply-demand backdrop remains supportive, with record US production and strong LNG exports providing a floor under prices even as crude struggles. Power-sector consumption varies with weather conditions while industrial demand remains stable, factors that suggest a comfortably supplied gas market that can accommodate both domestic demand and strong exports.

This article is for informational purposes only and does not constitute investment advice.