WTI Crude Oil Futures (June Future)
Friday’s Settlement: 61.02, Up +1.11 [+1.85%] for the day, up +2.73 [+4.68%] for the week
WTI Crude Oil was higher for the week after Chinese trade talks were announced on top of the array of bullish catalysts that fed into our bullish outlook.
Today, Crude Oil is up +2.37 [+3.88%] to 63.39
Markets are trading martedly risk-on this morning after China and the US agreed to a temporary reprieve from elevated tariff levels. The US agreed to lower their tariffs on Chinese goods to 30% from 145% while China will reduce tariffs to 10% from 125%. The reudctions will give the countries three months to work on a finalized trade deal.
The announcement of the interim deal led to strong buying in equity and crude oil markets while gold is sharply lower and the dollar is sharply stronger.
While were maintaining our bullish outlook through today, our target of 65.00 on longs is close, and some levels of profit taking are adivsed.
Summary & Bias
Bias Summary from May 5th – 6th:
The bearish catalyst that has kept us sidelined has now been realized. As we turn our analysis forward, the environment is chalked with bullish potential catalysts. Because of this, we shifted our bias to Neutral / Bullish the morning of May 5th on the Sunday night ~4% gap lower in futures.
On paper, the forward-looking balance sheet looks oversupplied with accelerated OPEC hikes against a weaker demand outlook with the global economic slowdown we’re currently experiencing.
This will be the bear case, and it’s a valid case, but it uses somewhat lazy math. If you back out Iranian barrels, lower US production growth, and back out some Venezuelan barrels, the picture looks much different.
When you add some risk-premia for potential Russian sanctions and an escalation of the Middle Eastern conflict, you get to our bull case of the mid-60s level.
We can now add improving US-China dialogue to the potentially bullish catalyst list. The top end of our medium-term outlook is $65, and we like prudent profit taking around $62.50.
Added 5/12/2025: With an interim trade deal reached, the upside on crude is extended.Markets will now try and price in a revived Chinese economy after the trade deal and we’d like to see where price action goes through today.
Technical Analysis:
Futures are trading into our longer term pivot and point of balance this morning around 63.53-63.81** this morning. While we remain bullish in our outlook, we like taking some profits at this level. We’ve caught the meat of this move higher and pressing longs here is a tougher trade.
We’d like to see how futures trade through today, but our upside target has largely been hit. As markets try and price in an improved Chinese economy, the upside target to crude may be lifted.
For intraday trading, our pivot and point of balance is set at 62.50 with support at…
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