Crude Oil Climbs Amid Geopolitical Tensions and Dollar Weakness

Energy Update

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WTI Crude Oil Futures (January)

Yesterday’s Settlement: 69.17, up +2.25 [+3.36%]

WTI Crude Oil futures rallied sharply yesterday as the dollar slumped and geopolitical concerns increased. The Biden administration allowed the use of U.S.-supplied long-range missiles for use within Russian territory for the first time yesterday, ramping fears of escalation. This morning there are reports that Ukraine has struck Russian border regions with long-range missiles.

This prompted Vladimir Putin to sign an updated nuclear doctrine expanding the conditions for using nuclear weapons. Russia – Ukraine escalation and strikes on energy facilities are to be watched closely watched.

Today, the dollar is marginally weaker on Yen strength and lower U.S. yields. There is a risk-off tone to trading and commodity buying as crude futures are trading on either side of unchanged. Russian nuclear rhetoric is driving the risk-off tone this morning.

Crude Inventories remain low while managed-money long positioning remains near record lows. If sentiment improves around the 2025 balance sheet outlook, crude oil markets have the potential for a sharp rally.

January 25 Delta call volatility and skew remains subdued and may offer traders an efficient and risk-defined vehicle to gain long exposure.

{Two-Day 30 Minute Chart; January 25DC Vol & Skew}

WTI Crude Oil futures surged on strong volume during the intraday open at 8:00 am CT yesterday, helping to solidify a line in the sand floor at 67.35-67.61 in front of Friday’s settlement at 66.92. It is now clear that a break below these supports is likely to continue lower. However, price action is certainly not in the clear as there is heavy resistance detailed in our levels below, beginning with…

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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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