WTI Crude Oil Futures (June Future)

Yesterday’s Settlement: 63.15, down -0.52 [-0.82%]   

Subscribers should be aware that our bias shifted to Neutral from Neutral / Bullish after upside targets were reached on Tuesday and Wednesday.  Sign up for our research portal for live updates and analysis on Crude oil and other markets.

A weak EIA report and technical resistance helped to drive crude lower yesterday. Globally, the risk-on rally took a break with equities moving lower and interest rates moved higher. The Dollar index ended the day marginally higher after a sharp reversal off the early morning lows. 

The EIA report was as follows [thousand bbls]:

• Crude: 3,454 vs -2,209 estimate

• Gasoline: -1,022 vs -938 estimate

• Distillates: -3,155 vs 120 estimate

• Refinery Utilization: +1.20% vs +0.70% estimate 

The EIA report was fairly bearish on crude while bullish on the products, especially diesel. Refinery utilization rates continue to hold strong.

Today, Crude Oil is down -2.01 [-3.21%] to 60.67 

Today’s macro environment is trading risk-off with equities, metals and the Dollar lower while treasuries are marginally higher. Crude is being dragged lower by the risk-on flows and President Trump’s comments on Iran. 

In an interview with NBC, an Iranian official reiterated Iran’s position that it was willing to limit their enrichment of Uranium in exchange for looser sanctions. President Trump referenced this interview when suggesting that the US and Iran are close to reaching an agreement on the nuclear accords. Crude Oil markets are trading lower on the comments. 

Summary & Bias

Bias Summary from May 5th – 6th: 

The bearish catalyst that has kept us sidelined has now been realized. As we turn our analysis forward, the environment is chalked with bullish potential catalysts. Because of this, we shifted our bias to Neutral / Bullish the morning of May 5th on the Sunday night ~4% gap lower in futures.  

On paper, the forward-looking balance sheet looks oversupplied with accelerated OPEC hikes against a weaker demand outlook with the global economic slowdown we’re currently experiencing.

This will be the bear case, and it’s a valid case, but it uses somewhat lazy math. If you back out Iranian barrels, lower US production growth, and back out some Venezuelan barrels, the picture looks much different.

When you add some risk-premia for potential Russian sanctions and an escalation of the Middle Eastern conflict, you get to our bull case of the mid-60s level. 

We can now add improving US-China dialogue to the potentially bullish catalyst list. The top end of our medium-term outlook is $65, and we like prudent profit taking around $62.50. 

Added 5/12/2025: With an interim trade deal reached, the upside on crude is extended.Markets will now try and price in a revived Chinese economy after the trade deal and we’d like to see where price action goes through today.

Added 5/14/2025: Subscribers to our research portal were alerted to our bias shift midday yesterday. While there is still some upside potential towards the 65.00 level, our target for the trade was around 62.50. Having reached our target, we would like to clear the book and wait for the next opportunity. 

Technical Analysis:

After failing again yesterday at our longer-term pivot and point of balance zone at 63.53-63.81***, June futures are trading back down into our support pocket at 61.05-61.83**. The Iran headline dragging futures lower is likely more off-the-cuff Trump speak than actual facts, but markets are pricing in Iran’s export potential regardless.

If prices can rebound today and settle above 61.83** momentum would remain in favor of the bulls while a settlement below 61.05** sets us up for another leg lower towards the 58.29-59.00** level.       

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

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