WTI Crude Dives as Tariff Whiplash and China’s Retaliation Shake Markets

Energy Update

/ by BlueLineFutures

WTI Crude Dives as Tariff Whiplash and China’s Retaliation Shake Markets

WTI Crude Oil Futures (March) 

Yesterday’s Settlement: 73.16, up +0.63 [+0.87%]   

WTI Crude Oil futures were driven almost entirely by tariff news yesterday. The Sunday night open produced a gap higher, reaching a high of 75.18 within the first 15 minutes of trading. Futures started their sell-off around 8:15 am when news leaked that Mexico would be making concessions to the Trump administration and that Mexican tariffs would be delayed by 30 days.

The Canadian tariff situation resolved itself later in the afternoon after Trudeau made similar concessions. 

The OPEC+ meeting came and went with few headlines. Russian oil minister Novak told reporters that Russia would increase oil production in April. While this statement grabbed headlines, it is within OPEC’s planned output increase schedule. Something to note was that the EIA was dropped as a secondary data source, a hit to the U.S. agency’s credibility. 

Trump proposed the creation of a U.S. sovereign wealth fund yesterday. As a country that runs a significant Current Account deficit, a significant budget deficit, and a sizeable Debt / GDP figure, the fund would be more of a Sovereign Leverage Fund than a wealth fund. Regardless, this type of proposal is something to watch for traders.  

Today, futures are lower by -2.2 [-3.03%] to 70.94  

The macro environment is trading mixed, with the Dollar weaker, equities flat, crude oil sharply lower, and precious metals showing notable strength. Markets are digesting yesterday’s tariff whipsawing and China’s retaliatory measures.  

Last night, China retaliated to Trump’s tariff raise with tariffs of their own and export controls. Chinese tariffs include a 10% increase to Crude Oil imports from the United States. LNG tariffs were put in place at a rate of 15% alongside coal. U.S. farm equipment was targeted heavily. The Chinese are targeting U.S. energy and farm equipment. The export controls will restrict the export of critical metals used in electronics, aviation, and defense. 

Technical Analysis:

WTI Crude Oil posted a 3.13 range yesterday. As we’ve noted, amplified volatility is to be expected. 

Futures this morning are sharply lower this morning after yesterday’s tariff resolution and China’s retalitory measures overnight. While momentum is favoring the downside, futures are now trading just below our major, rare, four-star support level of 71.25-71.63****.

The U.S. open and the first hour of trading will be telling. Volatility will likely be amplified. For the chart to start repairing itself, a close above the 71.25-71.63**** is crucial. Support around this level needs to hold. 

For intraday trading, our pivot and point of balance is set at 72.05. We’d really like to see volume trading above this level and a settlement above our rare four star support level before initiating speculative long positions. Intraday resistance is set 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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