WTI Crude: Geopolitical Tensions and Trade Fears Shape Market Direction

Energy Update

/ by Blue Line Futures

WTI Crude: Geopolitical Tensions and Trade Fears Shape Market Direction

***ANALYSIS & LEVELS ROLLED TO MAY FUTURES

*** Bias shift to Neutral / Bullish from Neutral

WTI Crude Oil Futures (May) 

Yesterday’s Settlement: 68.07 up +1.16 [+1.73%]   

WTI Crude Oil futures rallied yesterday on further escalation of the Middle Eastern conflict, new Iran / China sanctions, and a new nuclear accord presented to Iran. 

Israel has continued their strikes and threats this week against Gaza, Lebanese and Yemen militants. Yesterday, government officials mentioned possible military action in the West Bank. 

The Trump administration sanctioned a Chinese Oil refiner and its CEO, citing purchases of Iranian crude oil. Chinese, Indian, and other Asian refiners have been stable customers for both Iran and Russia. These sanctions could halt some of those flows, as company executives now have to weigh the risk of personal sanctions when deciding to buy Iranian crude.

The President also delivered a new nuclear accord to Iran, giving them a two-month deadline to comply or face “maximum pressure” sanctions. Iran’s 1.5mln bpd supply to export markets (historically) is increasingly at risk.      

Today, May Futures are lower by -0.07 to 68.00

The macro environment is trading risk-off, with equities lower, the Dollar stronger, bonds higher, and precious metals weaker. Trade and economic velocity concerns continue to drag markets downwards.  

Yesterday, the White House press secretary warned of “Big Tariffs” coming but provided no more clarification. The comments have stoked fear across risk-assets, eventually leaking into the crude market to help drive price off their overnight highs.

Also, we are fairly bullish on the Dollar at these levels. A resurgence of USD strength could weigh on the upside to crude if it comes to fruition. 

Technical Analysis:

May futures settled right below the top-end of our longer-term pivot pocket yesterday but have traded above the 68.10*** mark in both yesterday’s session and today’s overnight trade.

Our outlook remains tactically bullish, but we’d like to see a settlement and some strength above that 68.10*** level. This morning, crude is showing relative strength, rallying back from overnight lows driven by “Big Tariff” fears.  

Globally, we need a turn in risk sentiment to help drive these assets higher. It seems like any technical strength that starts building across risk-assets gets whacked from tariff and trade fear selling almost immediately.

For intraday trading, our pivot and point of balance 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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