Crude Under Pressure: Key Levels to Watch Amid Bearish Catalysts​

Energy Update

/ by BlueLineFutures

Crude Under Pressure: Key Levels to Watch Amid Bearish Catalysts

WTI Crude Oil Futures (March) 

 

Yesterday’s Settlement: 71.37, down -1.95 [-2.66%]

WTI Crude Oil futures moved sharply lower yesterday on three core bearish catalysts including a bearish EIA report, a weak OPEC+ demand projection, and progress on ending the war in Ukraine. 

 

Tuesday night’s API printed bearish, showing Crude builds of 9mln bbls. Wednesday’s EIA report followed suit and printed fairly bearish figures shown below. It should be noted that product demand continues to outperform, underpinning U.S. crude oil strength and low inventories. EIA figures were as follows [thousand bbls]:

  • Crude: +4,070 vs +2,305 estimate
  • Gasoline: -3,035 vs +1,210 estimate
  • Distillates: 135 vs -2,250 estimate
  • Refinery Utilization: +0.50% vs +0.20% estimate

OPEC+ left 2025 and 2026 demand projections unchanged, which should have been expected. The group once again highlighted compliance and their willingness to balance the market despite any outside forces.

 

Talks of ending the war in Ukraine have made progress. This is a bearish catalyst not worth fighting if it continues to dominate rhetoric. Middle Eastern tensions are continuing to escalate with little to no risk-premia built into the futures contracts. Russian – Ukraine ceasefire rhetoric will outweigh Middle Eastern tensions to favor the bears if progress continues. 

 

Today, futures are lower by -0.84 [-1.16%] to 70.54

 

Russian – Ukraine ceasefire talks are progressing this morning as Trump and Putin agreed to talks. Striking a deal on a ceasefire will be a long and arduous task. Ukraine has a foothold on Russian territory while Russia controls Ukrainian territory. Also, Zelinsky has included the re-annexation of Crimea as a prerequisite to a ceasefire deal previously. This is likely a non-starter for Russia.

 

Coming to a true agreement will be a long and dramatic process. Despite this, markets are beginning to price in the possibility of a deal and ceasefire headlines are increasing. If talks progress through today, it is potentially a bearish catalyst not worth fighting from the bull side. Buying opportunities will present themselves as global inventories remain tight, but a washout in longs is possible.    

 

Technical Analysis:

 

With the increasing possibility of a Russian – Ukraine ceasefire, we are shifting our bias back to neutral. March futures are currently sitting at a strong three-star support level of…

 

 

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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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