WTI Crude Oil Futures Slip After Rally as Macro Uncertainty Weighs on Sentiment
WTI Crude Oil Futures (April)
Yesterday’s Settlement: 70.35, up +1.73 [+2.52%]
WTI Crude Oil futures posted their best rally in six weeks yesterday after President Trump vowed to move ahead with tariffs on Canada and Mexico. On Wednesday, the president commented that the tariffs would be delayed until April, leading some to believe that his threats were mainly a bargaining tactic as opposed to a real threat. That was reversed yesterday morning.
The tariff comments put a bid under Crude futures while causing an equity market meltdown. The sell-off in equity markets dragged economic and risk sentiment down with it as traders prepared for today’s key PCE data.
Today, futures are lower by -0.90 [-1.28%] to 69.45
PCE figures printed in-line with estimates which has fueled some risk-on sentiment as we head into the U.S. open.
Chinese data showed that their oil consumption contracted last year, raising concerns that the world’s largest importer has reached peak demand. Trump’s comments regarding ending the Ukraine – Russia war are also fueling some sellers.
The macro environment is trading risk-on after the PCE figure. The dollar is marginally higher but is trending lower on the day, interest rates are moving lower and equity markets are moving higher.
Technical Analysis:
Yesterday, we highlighted the 70.03-70.35*** zone, which we’ve been using as a longer-term pivot and point of balance for the market. A settlement above or below this level would help stifle the bearish momentum in crude oil futures. Yesterday’s settlement of 70.35 was right on the nose, and we thought this would help stifle some bearish sentiment.
Today, futures are sharply lower. The prospect of the war ending in Ukraine and fears of a further slowdown in China have outweighed bullish prospects. Momentum still favors the bears and we expect choppy markets to continue.
For intraday trading, our pivot and point of resistance is set at…
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