WTI Crude Oil Futures (August Futures)

Yesterday’s Settlement: 68.38, up +0.05 [+0.07%]

WTI Crude Oil futures finished the day marginally higher yesterday, recovering most of the early morning sell-off we saw into the US open. Israel-Iran tensions are continuing to simmer, and there’s talk now of OPEC+ pausing additional output hikes after this 2.2 million bbl / day is unwound through September.

The “Group of 8” has another 1.65mil bbl’s to unwind after the 2.2mil bbls wraps up in September. OPEC+ as a whole has an additional 2 million barrels a day of cuts to unwind on top of that. If the group pauses on the additional 1.65 million barrels, the fundamental backdrop heading into Q4 looks promising for the bulls.

Today, futures are lower by -1.22 [-1.78%] to 67.16

The macro environment is trading mixed, with precious metals higher and risk-assets (equities, crude oil) trading lower. Heavy selling into the US open is starting to look like a trend again in crude oil markets.

Data Releases:

Yesterday’s EIA report was as follows [thousand bbls]:

Crude Oil: +7,070 vs -1,878 estimate
Gasoline: -2,658 vs -221 estimate
Distillates: -825 vs -907 estimate
Refinery Utilization: -0.20% vs -0.36% estimate
The report was fairly bearish at face value, but the draws in both gasoline and diesel were good to see.

Technical Analysis:

Futures are trading into support here at the US open. The trade has been to fade these moves but we’ll see how the day goes. If we settle below our major, three-star resistance level of 68.39-68.65***, momentum to the upside doesn’t look great.

The newsflow surrounding OPEC looks bullish in our opinion and geopolitical risk remains abundant. Holding short positions over the weekend in this environment remains tough. Risk is still skewed to the upside.

We need a settlement above 68.39*** to maintain bullish momentum.

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

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