WTI Crude Oil Futures (August Futures)

Yesterday’s Settlement: 66.57, down -1.81 [-2.65%]

In yesterday’s letter, we were worried about this bullish momentum losing steam. That worry was drawn entirely from a technical/charting perspective.

Updated tariff news came through yesterday morning to push the technical weakness into a sell off after the President started talking tariffs in the morning.

The fundamental backdrop for WTI remains bullish in the immediate term. Spreads are elevated, and global supply (on paper) remains tight. Bears and journalists have leaned on the forward-looking balance sheet for over a year, pointing towards this ever-looming supply glut that never comes.

But, Crude Oil doesn’t trade in a vacuum. Tariff talk is heating up, and feelings of uncertainty look like they’re creeping back into financial markets. Risk-off jitters seem likely into the weekend. Confidence in our bullish bias is the weakest it’s been over the past few weeks at these levels.

However, upside volatility looks pretty cheap if you have to get long. Price has settled into a tighter trading range, and a bit of a lull. The world, and the catalysts that drive these big swings in oil markets, have not.

Today, futures are higher by +0.80 [+1.23%] to 67.35

The macro environment is trading mixed, positive headlines out of China on US-Sino cooperation are helping buoy risk-on assets. This remains an unpredictable environment, and volatility could flare up again. Risk remains to the upside, and open-ended risk on shorts is advised against.

Data Releases:

N/A

Technical Analysis:

Bullish momentum did not hold yesterday, but we’re seeing a positive bounce this morning out of China. We have zero confidence this bounce will hold, and our confidence in the bull bias at these levels is the lowest it’s been over the past few weeks.

Unpredictability has been and will continue to be the theme for markets this year. The incessant selling of option premiums by systematic/quantitative programs is opening up opportunities across a wide range of commodities.

For intraday trading, our pivot and point of balance is set at…

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