Crude Tests Key Support After Russia Tariff Shock

Energy Update

/ by Blue Line Futures

WTI Crude Oil Futures (August Futures)

 

Yesterday’s Settlement: 66.98, -1.47 [-2.15%]

 

WTI Crude Oil futures fell yesterday after President Trump announced higher tariffs on Russia in lieu of tighter sanctions on the country’s oil exports.

 

After the President teased the Russia announcement last week, markets started inflating risk premiums in anticipation that tighter sanctions would be announced this week.

 

Monday featured a choppy trade across global markets as traders squared positions into today’s CPI report.

 

August Crude fell to our key support level of 66.85*** as dip buyers were uncovered.

 

OPEC+ released fairly bullish demand estimates which should be taken with a grain of salt. The group has consistently over-forecasted demand for the past few year and traders generally discount these demand figures by various amounts.

 

Today, futures are trading -0.05 [-0.07%] to 66.93

 

After the US closed, Nvidia issued a statement that it would be able to export key AI chips to China. This buoyed equity markets and risk sentiment overnight, as traders interpreted the news as a positive signal regarding trade negotiations.

 

Overnight Chinese data was mixed, with higher-than-expected GDP and Industrial Production, but lower-than-expected Retail Sales figures. The mixed data led to a sell-off of Chinese equities as markets attempted to signal that further stimulus would be necessary.

 

One bright spot coming out of China was that refinery runs posted their highest figures in over two years as onshore refiners took advantage of their improved margins. This is a trend to watch closely.

 

This morning, the US CPI came in slightly softer than expected, but inflationary signals were present within the report. Markets are trading risk-on in the initial minutes following the release of the number.

 

There is a Financial Times report that President Trump offered to strike Moscow directly while talking with Zelinsky this morning. I am not seeing much confirmation on this report but this is something to keep a close eye on as tensions escalate.

 

Data Releases:

 

N/A

 

Technical Analysis:

 

August futures traded into key support yesterday after President Trump’s announcement regarding Russia disappointed markets. The risk-on tone in equities could help drive crude higher, alongside the news that President Trump is encouraging strikes on Moscow directly.

 

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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