WTI Crude Oil Futures Stabilizing Around Key Support; Risk-Defined Longs in Play

WTI Crude Oil Futures (April)

Yesterday’s Settlement: 66.31, down -1.95 [-2.86%]

Please note that our trading Bias below the technical section has shifted to Neutral / Tactically Bullish

Crude Oil markets finished sharply lower as headlines regarding the Mexico / Canada tariffs continued to signal a potential rollback.

The Chinese embassy also tweeted they were “Ready for a trade war or any kind of war that the U.S. wants. This came as the Chinese Navy continues to conduct live-fire drills off the coast of Australia. I don’t think we’re going to war with China, but the sentiment should be noted.

Today, April Futures are higher by +0.39 [+0.59%] to 66.70

Global risk assets are trading mixed to risk-off today. The Dollar is weaker once again, while U.S. equities are markedly lower. Interest rates are mixed, but bonds have seen broad buying since 2 a.m.

Crude is holding major support for now. Bearish catalysts have seemingly come out of the wood work over the past three weeks to continually pummel this market. A consolidation at these levels is vital, a break below here opens the door up, technically speaking, to the lower 60’s and potentially a high 50 handle.

Taking a shot at some risk-defined crude longs around the 65 level is not a bad bet with inventory levels sitting where they’re at. Front-month futures should have some cash market strength behind them; the issue is getting whacked upside the head by the latest headline / bear catalyst that’s likely coming around the corner. But, down around 65.00, the risk-reward starts looking tolerable ok. Risk-defined positioning is strongly advised – speak to your Blue Line Futures point of contact for more information if interested.

Technical Analysis:

WTI futures touched a low of 65.22 yesterday but rallied back to settle above our major three-star support level of 65.99-65.41***. We are hoping a tradeable range starts developing here between 65.99*** and the top end of our longer-term pivot pocket of 68.00***.

Volatility is likely to continue; prioritize risk management. But, risk defined long positions down around 65 are not bad bets in relation to the current inventory levels. We advise keeping long positioning as close to front month futures as possible. We may begin nibbling at some longs here but our confidence level is low.

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

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