WTI Crude Oil Futures (January)
Yesterday’s Settlement: 68.94, down -2.3 [-3.23%]
WTI Crude Oil futures fell sharply following reports that Israel had agreed to a truce with Lebanon’s Hezbollah “in principle”. The appointment of Scott Bessent, who’s plan to reduce the deficit also includes the ramping of U.S. crude oil production aided the fall in oil prices as well. Bessent is seen as a moderating force within the Trump administration and his appointment weakened treasury yields and stymied dollar strength.
The fall in WTI came alongside a sharp drop in the dollar index (DXY), a move seen as anomalous compared to recent price action.
Global risk assets seemingly brushed off major headlines, including France & the U.K. considering sending troops to Ukraine.
Today, WTI Crude Oil futures are higher by +0.75 [+1.05%] to 69.69. After market close yesterday, Trump announced a baseline 25% tariff on Canada & Mexico and an additional +10% tariff on China that will start on January 20th. Mexico and Canada are key suppliers of Crude Oil to American refineries – and while we don’t have specifics on the tariff plan just yet, tariffs and trade tensions should be eyed closely by traders. The Chinese tariffs were largely known, and the PBOC intervened last night to defend currency weakness. The Chinese Yuan is weaker by -0.20%, the Canadian Looney by -0.98%
Yesterday, prices blew through short-term support at 70.42 – 70.11 and closed just slightly off the lows near longer-term support at 68.45 – 68.64. Our key three-star support level of 69.29-69.61 was held through the overnight trade. This morning, prices have rallied +0.75 to 69.96. Our Pivot and point of balance for the day is…
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