Crude Oil Dips: Market Awaits China’s Next Stimulus Steps

Energy Update

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Friday’s Close: Settled at 70.38, down -1.98 [-2.74%] for the day and up +0.89 [+1.28%] for the week

WTI Crude Oil futures fell sharply Friday after failing to settle above technical resistance. Overnight, Crude Oil futures held mostly steady to marginally lower until they started falling precipitously around midnight. WTI futures are lower by -1.87 [-2.63%] into the U.S. open.    

Late Friday and over the weekend, reports and rumors started circulating on China’s week-long stimulus meeting. The country is reportedly holding back on releasing a concrete plan on direct stimulus allocations until Trump takes office, but will move ahead with recapitalizing their banks and municipalities at scale in preparation.

The weekend also featured weak Chinese inflation data as their consumer continues to struggle (chart below). Chinese stimulus will take time to gain traction, and while we’ve seen signs of improvement, the data will take time to come through convincingly. 

CFTC data showed that managed money added 79.5k longs across the four main crude oil contracts as traders covered short positions. Net long positions within the crude oil space remain historically low (chart below).   

{Chinese Inflation Data; Managed Money Net Positioning}  

WTI Crude Oil futures plunged upon the European open overnight and took out the November 6th low. Given heightened volatility, this low will align as our Pivot and point of balance, with clear support and resistance lines drawn and highlighted in our levels below…


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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.

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