Crude Slammed, What’s Next?

Energy Update

/ by BlueLineFutures | Leave a comment

Crude Oil fell sharply on OPEC news. We help break it all down and give you an actionable roadmap to managing the volatility.

BREAKING NEWS:


UPDATED LEVELS POST-DROP:

Crude has fallen sharply right before the U.S. open after a report that OPEC+ plans to proceed with previously announced production hikes in Q4 was released. If this report is accurate, downwards pricing pressure will persist for some time. Markets will need significant upgrades to the demand outlook for the 2025 balance sheet to be right sized. We’d caution against any new longs into the weekend following this headline. The trade has been waiting on this OPEC decision and the possibility of them rolling back production hikes has been seen as a potential catalyst to the bull story. It should be noted that disinformation surrounding OPEC plans is quite common and we have not seen an official press release from OPEC confirming this report, the chance for whipsaw like volatility on this report is present for the day.

PRIOR TO BREAKING NEWS:

WTI Crude Oil (October)

Yesterday’s close: Settled at 75.91, up 1.39

WTI is little changed heading into U.S. open after a short lived rally overnight. WTI made an overnight high of $76.60 before falling back below yesterday’s settlement. Yesterday’s rally in the crude space was driven primarily by positive U.S. economic data and worsening supply disruptions in Libya. Also aiding price yesterday was news out of Iraq that they were cutting production and cancelling a 1mil bbl cargo set for shipment. Goldman Sachs and Morgan Stanley cut their oil price forecasts for 2025 this week as demand concerns persist. We’re set to end the week with no changes to the bull or bear catalysts that we cited to start the week as geopolitical tensions weigh against the waning demand story while OPEC production plans remain uncertain. Iraq’s production cuts and cargo cancellation was new news yesterday that should provide the bulls some support. The kicker for a longer term trend in crude prices remains OPEC’s production plans. If they roll-back their planned production cuts, the 2025 balance sheet will start to look a lot healthier, if they follow through with production increases pricing pressure on the downside will remain. We expect choppy markets and two sided volatility until that decision is finalized.

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Futures trading involves a substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians, or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy, and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third-party application. Blue Line Futures employees use only firm-authorized email addresses and phone numbers. If you are contacted by any person and want to confirm your identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

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