WTI Crude Oil Futures (June Future)

Yesterday’s Settlement: 62.27, down -1.40 [-2.20%]  

WTI Crude Oil futures fell yesterday on trade relations and news regarding OPEC. Kazakhstan came out yesterday and said that their oil production was out of their control, dashing hopes they would be willing to work with OPEC. Reuters then reported that some members would push for an even more accelerated output hike plan in response.

While the rest of the macro environment traded risk-on, crude sold off on the OPEC news.

Until we get official word from Saudia Arabia and OPEC on how they will handle the Kazakhstan situation, we are taking no positions. If Saudia Arabia responds aggressively, risk is to the downside.  

Today, Crude Oil is up +0.87 [+1.40%] to 63.14

Futures bounced off key support yesterday, making daily lows around 9am CST. A continuation of that bounce is coming through this morning.

Overnight, China denied engaging in talks with the U.S. and said that it would not negotiate until unilateral tariffs were lifted. This has sparked some dollar weakness and Gold strength, which has been the leading indicator of these sharp risk-off moves.  

Today, we’re waiting on official word from OPEC on how they’ll deal with Kazakhstan and how the Trump administration will respond to China’s overnight statement. Trump may respond negatively to these Chinese comments and spark a risk-off trade, but that is just speculation.        

Technical Analysis:

WTI Crude Oil futures traded into support yesterday and have since bounced. We remain neutral in this environment and await some clues on how OPEC will deal with Kazakhstan.

Until then, we are sitting on our hands as the risk skews wide in both directions until we get that response.

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

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