Crude Finds Its Floor? WTI Stabilizes Above Key Support After Two-Day Rout

WTI Crude Oil Futures (August Futures)

Yesterday’s Settlement: 64.37, -4.14 [-6.04%]

Crude futures fell sharply once again yesterday as the conflict between Iran and Israel, in the opinion of markets, reached its conclusion. President Trump declared a ceasefire and threatened Israel if it didn’t comply, but an official truce between Iran and Israel has not been signed.

President Trump commented yesterday that China was “free to buy Iranian oil,” which aided in the sell-off. Markets took this as a sign that tighter sanctions on Iran’s crude oil exports would not be imposed, alongside general confusion, as Iranian oil has been sanctioned for years.

Shortly after crude’s settlement, the NYT and CNN reported that the majority of Iran’s nuclear enrichment capabilities had not been destroyed in US strikes. This caused a slight bump to crude futures through the latter hours of the US session.

President Trump and his team denied these reports, insisting Iran’s nuclear program is “completely destroyed”.

Today, +0.43 [+0.67%] to 64.80

The macro environment is trading mixed, with the Dollar stronger, equities higher / flat, and treasuries nearly unchanged. The commodity complex is generally weaker on the day.

The stories surrounding Iran’s nuclear program, which may not have been “completely destroyed,” are buoying CL prices alongside another bullish API report.

Data Releases:

Last night’s API release was as follows [thousand bbls]:

Crude: -4,280
Gasoline: +764
Distillates: -1,030
Estimates for today’s EIA report are as follows [thousand bbls]:

Crude: -1,100 estimate
Gasoline: +500 estimate
Distillates: +1,000 estimate
Refinery Utilization: +0.70% estimate
With the API trending bullish, traders will be on the lookout for another bullish EIA report. Last week’s EIA figures showed a sharp drawdown in Crude inventories.

Technical Analysis:

Our intraday support level of 64.23*** held firm yesterday. We’re hoping this level becomes a tradeable bottom and is our intraday support point once again today. Prices have stabalized above our longer term pivot pocket of 63.82-64.23***.

If the 64.23 level holds, a trading range between 64.23 – 66.47 is developing and actionable. If our longer-term pivot pocket breaks, our next support zone is close and should hold. In our view, risk is skewed to the upside.

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