WTI Rallies on Trade Hopes… But Could Iran Send Prices to the $40s?

Energy Update

/ by Blue Line Futures

WTI Rallies on Trade Hopes… But Could Iran Send Prices to the $40s?

WTI Crude Oil Futures (May)

Friday’s Settlement: 61.50, up +1.43 [+2.38%] for the day, down -0.49 [-0.79%] for the week

WTI Crude Oil futures ended last week marginally lower after a volatile trading week. The week’s low was 55.12, creating a trading range of 8.22. Continued concerns around global macroeconomic health caused by the Trump trade war weighed on futures and risk assets.

A 90 day pause was announced Wednesday which drove risk assets sharply higher and resulted in crude finishing higher in the week. On Wednesday, Crude traded in a 7.81 range.

The volatility seen last week is creating ripple effects across the financial system, and a higher volatility regime should also be somewhat expected this week.

The Dollar traded significantly lower last week with the DXY moving to three year lows.

Today, Crude Oil is up +0.82 [+1.33%] to 62.32

Macro markets are trading risk-on this morning with equities sharply higher, treasuries higher, and most commodities higher (grains and gold marginally lower). Crude is trading higher, riding the risk-on wave.

Over the weekend, the Trump administration announced a temporary tariff exemption on chips and electronics. This is the core driver of the risk-on move this morning.

The Trump administration is meeting with Iranian delegates this morning, and talks are reportedly “constructive.” An improvement in U.S.-Iran relations could be an unexpected bear catalyst that traders should be aware of. This market cannot handle the full return of Iranian barrels to the export market, and WTI in the 40s becomes a possibility if that were the case.

Technical Analysis:

WTI Crude Oil futures are trading higher this morning on risk-on global momentum. We’re eying a run back up to last week’s highs of 63.34, a settlement above here sets us up for considerable chart repair if we get a settlement above 64.10****.

Failure to retest last week’s high of 63.34 keeps momentum squarely in favor of the bears, making a run back to the mid-50s probable.

Volatility is likely to remain amplified this week, making longer-term fundamental positioning extremely difficult. This is a headline market and should be traded as such. Traders should prioritize risk management and position sizing.

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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