WTI Crude Dips as Trade Tensions and Geopolitical Risks Weigh on Markets
WTI Crude Oil Futures (April)
Yesterday’s Settlement: 70.70, up +0.30 [+0.43%]
WTI Crude Oil futures rallied off technical support and supply-side risks after Ukrainian forces struck the 300k+ bpd Rosneft refining facility inside of Russia, and fresh sanctions were imposed on Iran.
The fresh Iran sanctions are a reminder of this administration’s “maximum pressure” attitude towards Iran.
Trade tensions also drove markets higher as Trump said in an Oval Office press conference that Canadian & Mexican tariffs are still planned.
Also of note was Trump’s announcement that Chinese-made ships would face heightened fees at U.S. ports, raising the cost of shipping almost everything.
Trump remains adamant about ending the war in Ukraine and made more comments regarding the subject yesterday, saying he was seeking “economic development” with Russia.
Today, futures are lower by -0.52 [-0.74%] to 70.18
Bonds are markedly stronger this morning, with the 10yr Yield down almost 10bps. The Dollar is moving lower alongside precious metals and crude oil. The strong move lower in yields should jar loose some flows today.
The U.S. economy continues to slide with the Citi Economic Index moving below 0 for the first time since September of 2024. Economic expectations and sentiment continues to be bitten by inflation and trade tensions.
The Israel-Hamas truce is set to end on Sunday, with Israel preparing for a restart of the war.
Technical Analysis:
Our outlook is for a choppy, range-bound trade. Concrete, longer-term positioning is tough in this market, and a tactical approach is still preferred.
Crude is hopefully settling into a trading range here, between our three star levels of 70.03-70.35*** and 71.34-71.70***. On a longer term trading time frame, 71.37-71.70*** is looking like a pivot, where consistent closes above this level are required for an extended bull move higher.
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