WTI Crude Oil Futures (February)
Yesterday’s Settlement: 73.56, down -0.40 [-0.54%]
WTI Crude Oil futures snapped their 5-day winning streak yesterday, settling lower by -0.40 after showing early morning strength.
Weakness in the U.S. dollar drove trade flows yesterday after a Washington Post article was released stating that Trump tariffs would be a much more dialed-back version than originally anticipated.
This caused a sharp sell-off in the U.S. Dollar heading into the U.S. open. Gold, silver, equities, and crude oil all rallied off the news through the open until Trump posted to Truth Social that the WAPO article was “fake news” – causing a sharp reversal in both gold and crude oil. The Dollar rebounded off the lows but remained fairly weak throughout the day.
This type of volatility should be expected at the start of the new administration and yesterday’s trade was reminiscent of Trump I, 2016 markets.
Today, futures are up +0.45 [+0.61%] to 74.01
The macro-environment is trading risk-on with equities, precious metals, and crude oil all higher. The USD Index is weaker by -0.11% while bonds are trading marginally lower. The 10 year yield is now up to 4.63% and is trading at the highs last seen since April.
In Crude news, there was a report that Chinese ports are being urged not to allow U.S. sanctioned tankers to dock or unload. The actual enforcement of sanctions against Iranian and Russian barrels is starting to bite as middle-eastern barrels continue to trade at a premium to the Brent contract.
Technical Analysis
The early morning strength we saw yesterday was wiped away quickly as Trump tweeted away the majority of crude oil strength and dollar weakness. The high yesterday was 74.99, a key level to be watched. The 73.84*** level was our key level to watch yesterday and we settled below there – this could dent momentum and signal a more sideways trade this week. This morning’s early strength may be faded into the U.S. open, as has been the trend over the past couple months.
For today, our levels are set at….
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