WTI Crude Rebounds After Sharp Drop Amid China Sentiment and OPEC Demand Cuts

Energy Update

/ by BlueLineFutures | Leave a comment

Yesterday’s Settlement: 68.04, down -2.34 [-2.34%]

WTI Crude Oil futures fell sharply yesterday on weak Chinese economic sentiment and continued dollar strength. The Trump trade is also weighing on price, as commodity market tourists position for a “drill baby drill” attitude in the coming administration.

So far, Trump’s cabinet appointments have featured China hawks, including staunch protectionist Robert Lighthizer as the U.S. Trade Representative. Chinese equity markets fell close to -1% after the announcement of Lighthizer. Other Chinese hawk appointments include Mike Waltz as National Security Adviser and Marco Rubio as Secretary of State. We remain hopeful that a trade deal will be cut with China, but the cabinet appointments made thus far signal anything but.

Early this morning, OPEC cut it’s oil demand forecast for 2024 by 107k bpd, the fourth consecutive month of demand cuts. OPEC’s demand forecasts have been considered too high by market participants for some time, and the cuts may garner headlines but don’t come as too much of a surprise. Demand was cut after Chinese and African imports came in lower than expected.

December futures are higher by +0.67 [+0.98%] to 68.67 as we enter the U.S. session. The US Dollar index is higher by +.322 [+0.31%] to 105.869 this morning and the metals complex is markedly weaker.

{Intraday Chart; US Dollar Index}

WTI Crude Oil futures made a low of 67.75 overnight around 11:30pm CST. From midnight through European open price action rebounded to make a high around the 68.80 level around 5:35am CST. Yesterday’s sharp move lower tore through the rare 4 star support level at 69.32-69.74 and the 70.00 flat price level at 3am on light volume. Our pivot and point of balance is set at 68.98, the Sunday night gap-open level set on the 10/28 trading session after Israel’s weaker than expected strikes on Iran. If price can get close above this level (68.98), momentum in the short term may favor the bulls.          

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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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