Oil prices dropped on Monday as China’s inflation rate declined, raising concerns about fuel demand in the world’s largest crude importer. Both Brent and WTI crude gave up gains from last week, with Brent losing over $1 before recovering slightly. Uncertainty over China’s economic stimulus package further dampened market sentiment.

Geopolitical tensions in the Middle East added pressure but were overshadowed by China’s economic concerns. This downturn in oil prices suggests potential volatility in natural gas markets as well, given the interconnected nature of energy markets and global demand factors.

Natural Gas (NG) is trading at $2.84, down 0.28%, after testing key support levels. The 4-hour chart shows prices hovering near the pivot point at $2.62, which will be critical in determining the next move. Immediate resistance sits at $2.67, with further barriers at $2.72 and $2.77.

On the downside, support lies at $2.56, followed by $2.53 and $2.49. The 50-day and 200-day exponential moving averages (EMA) are both aligned at $2.68, suggesting strong price consolidation.

A bearish outlook is in play if prices stay below $2.62. However, a decisive break above this level could shift momentum to the upside, potentially driving more bullish action.

USOIL is trading at $74.68, down 1.02%, showing weakness as it flirts with the pivot point at $74.79. The next key resistance lies at $76.20, followed by $77.40 and $78.44.

On the downside, immediate support can be found at $73.43, with further levels at $72.69 and $71.85. The 50-day EMA at $74.58 is keeping prices supported for now, while the 200-day EMA at $72.59 highlights the longer-term trend.

If oil remains above the pivot point of $74.79, the bullish momentum could continue. However, a break below this level would likely lead to a sharper decline as selling pressure increases. It’s a critical zone to watch.