Crude Swings on War Escalation and Ceasefire Hopes, Volatility Explodes

Energy Update

/ by Blue Line Futures

Crude Swings on War Escalation and Ceasefire Hopes, Volatility Explodes


Update:

On Friday, Iran downed a US fighter jet – with the pilot reportedly ejecting to safety. Over the weekend a US rescue operation took place with Iran claiming to have downed multiple US aircraft. The conflict continues to escalate, and President Trump issued another deadline for Iran – which expires tomorrow.

 

Crude futures opened the Sunday session higher which drove down equities and risk assets. But, in the early European session, US allies reportedly made a breakthrough on the Pakistani brokered peace deal.

 

While the sourcing and viability around this headline is flimsy, Reuters is reporting that the current talks are for an immediate ceasefire and a full peace-plan to be proposed within 15-20 days. The Reuters journalists seem more optimistic on the proposal than Bloomberg, and it’s yet to seen how Israel reacts to this plan.

 

Headlines will continue to produce two sided volatility through the week. This conflict is coming to a precipice – a cease-fire, even if it’s short-term, would likely ease pressure on markets. We have seen ceasefire pump-fakes., promises, declarations of victory, promises of guarding convoys through the strait, remarks that we control the strait – – it’s very difficult to know what we should take seriously.

 

Price will likely remain two-sided through the week – but path of least resistance early on seems to be to the downside.

 

Technical Summary

Thursday – 113.41*** the previous highs are the most important level to watch for today. If the May contract can manage to rip through that level with volume and conviction, this could get ugly to the upside. A failure at this level heightens the probability of a consolidation lower, but above 100.

 

The bearish news flow overnight puts this breakout into question. If this ceasefire news ends-up being fake-news – there is likely to be pain to the upside. Energy markets are becoming strained – and price could become inelastic for a short period of time for some buyers. 105** is the next likely region of support – but technical generally aren’t going to matter on fundamental flipping news-flow.

 

Risk-management should remain a priority and anyone who speaks confidently about how this goes should not be taken seriously – – this is about as explosive and as unpredictable as it can get in commodities – – it’s a coin flip – – and we’re not in the business of coin flips when risk is this high.

 

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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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