WTI Crude Holds Steady Amid Fed Volatility and China Concerns

Energy Update

/ by BlueLineFutures | Leave a comment

ALERT JAN CONTRACT EXPIRY DEC 19th. ROLL TO FEBRUARY ADVISED.  

WTI Crude Oil Futures (February)

Yesterday’s Settlement: 70.02, up +0.37 [+0.53%]  

WTI Crude Oil futures rallied sharply yesterday morning, making a daily high of 70.80 [+0.85, +1.22%] around 10am cst., right at the bottom end of our key three-star resistance zone. From then on, the afternoon trade was dominated by the Fed’s FOMC meeting which sparked fireworks across global risk-assets.

While the Fed cut the policy rate by 25bps as expected, their forward projections and rhetoric towards future rate cuts caught some traders off guard. The Dollar moved sharply higher alongside bond yields while equities, precious metals, and commodities moved sharply lower. 

Relative to the rest of the commodity and risk-asset complex, Crude oil futures held in pretty well yesterday which was a welcomed sign.

Yesterday’s EIA report showed a solid draw in crude and diesel stocks as refinery utilization rates dipped lower. Figures are as follows [thousand bbls]:

  • Crude: -934 vs -1,700 estim
  • Gasoline: 2,348 vs +2,000 estim
  • Distillates: -3,180 vs +1,100 estim
  • Refinery Utilization: vs +0.00% estim

The trend of counter-seasonal draws in U.S. crude oil inventories remains steady.

Today, futures are higher by by +0.18 [+0.26%] to 70.24.

Crude Oil is holding steady this morning in the face of Fed driven volatility and fresh pessimistic news out of China.

Last night, China’s largest oil refiner, and the world’s largest importer of crude oil, said that domestic gasoline demand has likely peaked. It did add that petrochemical demand should remain strong, but the rhetoric is still fairly concerning.  

This morning, U.S. Q3 GDP printed hotter than expected, with Q3 Annualized GDP at +3.1% vs +2.8% estimates and +2.8% prior. Core PCE for the quarter was higher than expected as well, at +2.2% vs +2.1% estimates. 

The ease at which crude futures are taking the China and Fed news is a welcomed sign, but the day is young and sellers could emerge here at the U.S. open. Yesterday’s EIA report is being cited by reporters as the catalyst for the steady crude prices.  

Technical Analysis

Yesterday’s Pre-Fed rally topped out right at our key three-star resistance zone at 70.82 but showed relative strength amongst the commodity complex.

Our pivot and point of balance is set at 69.65 for the day. Intraday resistance is apparent at…

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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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