WTI Crude Oil Futures (March) 

Yesterday’s Settlement: 73.16, up +0.63 [+0.87%]   

WTI Crude Oil futures were driven almost entirely by tariff news yesterday. The Sunday night open produced a gap higher, reaching a high of 75.18 within the first 15 minutes of trading. Futures started their sell-off around 8:15 am when news leaked that Mexico would be making concessions to the Trump administration and that Mexican tariffs would be delayed by 30 days.

The Canadian tariff situation resolved itself later in the afternoon after Trudeau made similar concessions. 

The OPEC+ meeting came and went with few headlines. Russian oil minister Novak told reporters that Russia would increase oil production in April. While this statement grabbed headlines, it is within OPEC’s planned output increase schedule. Something to note was that the EIA was dropped as a secondary data source, a hit to the U.S. agency’s credibility. 

Trump proposed the creation of a U.S. sovereign wealth fund yesterday. As a country that runs a significant Current Account deficit, a significant budget deficit, and a sizeable Debt / GDP figure, the fund would be more of a Sovereign Leverage Fund than a wealth fund. Regardless, this type of proposal is something to watch for traders.  

Today, futures are lower by -2.2 [-3.03%] to 70.94  

The macro environment is trading mixed, with the Dollar weaker, equities flat, crude oil sharply lower, and precious metals showing notable strength. Markets are digesting yesterday’s tariff whipsawing and China’s retaliatory measures.  

Last night, China retaliated to Trump’s tariff raise with tariffs of their own and export controls. Chinese tariffs include a 10% increase to Crude Oil imports from the United States. LNG tariffs were put in place at a rate of 15% alongside coal. U.S. farm equipment was targeted heavily. The Chinese are targeting U.S. energy and farm equipment. The export controls will restrict the export of critical metals used in electronics, aviation, and defense. 

Technical Analysis:

WTI Crude Oil posted a 3.13 range yesterday. As we’ve noted, amplified volatility is to be expected. 

Futures this morning are sharply lower this morning after yesterday’s tariff resolution and China’s retalitory measures overnight. While momentum is favoring the downside, futures are now trading just below our major, rare, four-star support level of 71.25-71.63****.

The U.S. open and the first hour of trading will be telling. Volatility will likely be amplified. For the chart to start repairing itself, a close above the 71.25-71.63**** is crucial. Support around this level needs to hold. 

For intraday trading, our pivot and point of balance is set at 72.05. We’d really like to see volume trading above this level and a settlement above our rare four star support level before initiating speculative long positions. Intraday resistance is set at…

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