How Low Can It Go?
WTI Crude Oil (October)
Last week's close: Settled at 73.55, down 2.36 on Friday and 1.28 on the week
Last Friday’s sharp sell-off in the Crude complex came on the heels of a Reuters report that stated OPEC+ was planning on moving ahead with production increases. Momentum in the Crude complex is currently to the downside. WTI is off around -2% this morning to the 72.25 level (October), while RBOB is off -2.40% to 204.32. Diesel (Heating-Oil) is the strongest of the group being down only -1.26% to the 225.00 level.
Production plans out of OPEC+ is a catalyst we’ve keyed in on as being the next major driver in crude pricing trends. While markets still await a final, official announcement from the group, the uncertainty is still being traded as bearish this morning.
Yesterday, Libya announced Force Majeure of their El Feel Crude Oil field. Normally this would be a decent bull catalyst, but OPEC+ production increases will likely be at a level that offsets the Libyan barrels being taken off the market. Other catalysts moving the markets include continued weakness out of China and doubts surrounding U.S. economic growth.
Pricing pressure will persist until we have word from OPEC. Again, we advise caution and that misinformation surrounding OPEC+ announcements is commonplace. But, unless OPEC publicly refutes these reports of production increases, the risk is pretty clearly to the downside.
Early weakness in WTI Crude Oil futures has taken out significant support at 72.20-72.59, which will now act as our Pivot and point of balance on the session. However, only a close back above 73.55-73.60 is needed to negate this early fallout. The next big level of support aligns multiple indicators at 71.46-71.93, and a close below here will confirm the bears are in the driver's seat.
Bias: Neutral
Resistance: 72.89-73.00** 73.55-73.60***, 74.02**, 74.33-74.85***
Pivot: 72.20-72.59***
Support: 71.46-71.93***, 70.88-70.92***, 69.60-69.81**, 67.98-68.61****
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. 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.
Last week's close: Settled at 73.55, down 2.36 on Friday and 1.28 on the week
Last Friday’s sharp sell-off in the Crude complex came on the heels of a Reuters report that stated OPEC+ was planning on moving ahead with production increases. Momentum in the Crude complex is currently to the downside. WTI is off around -2% this morning to the 72.25 level (October), while RBOB is off -2.40% to 204.32. Diesel (Heating-Oil) is the strongest of the group being down only -1.26% to the 225.00 level.
Production plans out of OPEC+ is a catalyst we’ve keyed in on as being the next major driver in crude pricing trends. While markets still await a final, official announcement from the group, the uncertainty is still being traded as bearish this morning.
Yesterday, Libya announced Force Majeure of their El Feel Crude Oil field. Normally this would be a decent bull catalyst, but OPEC+ production increases will likely be at a level that offsets the Libyan barrels being taken off the market. Other catalysts moving the markets include continued weakness out of China and doubts surrounding U.S. economic growth.
Pricing pressure will persist until we have word from OPEC. Again, we advise caution and that misinformation surrounding OPEC+ announcements is commonplace. But, unless OPEC publicly refutes these reports of production increases, the risk is pretty clearly to the downside.
Early weakness in WTI Crude Oil futures has taken out significant support at 72.20-72.59, which will now act as our Pivot and point of balance on the session. However, only a close back above 73.55-73.60 is needed to negate this early fallout. The next big level of support aligns multiple indicators at 71.46-71.93, and a close below here will confirm the bears are in the driver's seat.
Bias: Neutral
Resistance: 72.89-73.00** 73.55-73.60***, 74.02**, 74.33-74.85***
Pivot: 72.20-72.59***
Support: 71.46-71.93***, 70.88-70.92***, 69.60-69.81**, 67.98-68.61****
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. 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.
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