Bullish Momentum Builds in Crude—Eyes on OPEC & Conflict Risks

WTI Crude Oil Futures (August Futures)

Yesterday’s Settlement: 67.45, up +2.00 [+3.06%]

WTI Crude Oil futures rallied yesterday after Iran blocked the UN’s International Atomic Energy Agency from any future inspections of the country’s nuclear sites. The blocking of inspection, alongside the speculation as to the amount of bomb grade uranium that survived US strikes, escalates the risk of the Israel-Iran conflict reescalating.

Iran-Israel tensions, US trade deals, and the OPEC meeting scheduled for this weekend will be the core drivers of crude oil through the rest of this week.

The US struck a trade deal with Vietnam yesterday, which put a bid under risk assets as traders started pricing in potential trade deals for the week.

Today, futures are higher by -0.22 [-0.23%] to 67.27

The macro environment is trading mixed, with precious metals higher, oil flat to lower, equities higher, and the Dollar mixed to unchanged as traders key in on this morning’s key Non-Farm Payrolls report.

Data Releases:

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

Crude: +680
Gasoline: +1,920
Distillates: -3.460

Estimates for today’s EIA report are as follows [thousand bbls]:

Crude: +3,800 vs -3,715 estimate
Gasoline:+4,200 vs +602 estimate
Distillates: -1,700 vs -1,030 estimate
Refinery Utilization:+0.20% vs +0.18% estimate

Technical Analysis:

WTI Crude Oil futures broke key resistance at the 67.06*** level yesterday, a second settlement above this level will keep momentum in favor of the bulls.

Futures remain above our longer-term pivot pocket, and 64.23*** represents a solid buying opportunity in our view. Consecutive settlements above 67.06*** would help build confidence in the bull case.

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