Crude Rolls to July—Volatility Rises on Geopolitics and Macro Jitters

**ROLL TO JULY ADVISED

WTI Crude Oil Futures (July Future)

Yesterday’s Settlement: 62.14, up +0.17 [+0.27%]

WTI Crude Oil futures were caught in the global risk-off move Sunday night through early Monday morning, and came into the US open lower by over 1.00. At the US open, risk-on buying pushed crude oil higher as geopolitical risks continued to weigh. July futures topped out at 62.70 by mid-morning.

President Trump then had a two-hour phone call with Putin and made a statement that Russia would begin ceasefire talks “immediately.” This caused crude futures to sell off, making a day-session low of 61.58. Futures rallied up to and through the official settlement to regain most of the Putin phone call sell-off.

Geopolitical risk and cash market strength helped to buoy futures throughout the day. Israel stated yesterday that it would take full control of Gaza, which will likely anger Middle Eastern neighbors considerably.

Today, Crude Oil is down -0.32 [-0.51%] to 61.82

The global macro environment is trading mixed to risk-off with equities marginally lower, treasuries higher, and gold higher. The Dollar is trading weaker except against the Peso, which is notably weaker.

At 3 a.m. CST, Iran’s supreme leader stated that he does not think a nuclear deal with the US is possible and asked the Trump administration to “stop talking nonsense.” This caused a sharp spike in futures, with the June contract rallying close to 1.00 in just 15 minutes.

Global refining margins have been showing strength, which has led to rising cash market activity. China reported notable weakness in its refining throughput for April, which continues to weigh on the global demand picture.

Summary & Bias History

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.

Added 5/14/2025: Subscribers to our research portal were alerted to our bias shift midday yesterday. While there is still some upside potential towards the 65.00 level, our target for the trade was around 62.50. Having reached our target, we would like to clear the book and wait for the next opportunity.

Technical Analysis:

Iranian comments should help shield crude from any continuation of this risk-off move into the US open. Catalysts have been leaning bullish, which has us favoring the long side from a tactical perspective. But, as far as a medium term trend trade goes, we remain neutral for now.

The 61.00** trading level is our foundation for tactical long positioning.

For intraday trading, our pivot and point of balance is set at…