Crude Testing 100-Day Simple Moving Average

February 21, 2019 2:49PM CST

As of Thursday, the April 2019 crude oil contract is being offered as the market weighs a build in this morning’s EIA number, a stronger dollar and downward price action typical with risk off sentiment in equites, metals, softs and interest rate products. Also of note, as crude had a built in inventories, the gasoline and distillate inventories had a draw. While the March crack spread closed yesterday at 9.32, the April crack spread is trading around 17.18 as of this writing and has rebounded almost 50% from January 31st’s 12.10 low.

 Visible in the chart below, today’s high tested the 100-day simple moving average for the second consecutive day as the market has cleared the $55 per barrel level, for now. In other relevant news, CFTC commitments of traders, which were delayed due to the government shutdown, have shown increases in longs. For the time being, it seems that 100-day moving average should be a significant indicator as the market has treated this level as resistance, in recent days, for now at least.

While today’s price action, at the time of this writing, has been an inside day, it would seem possible for the market to give back some of its recent strength as today could be the first down day in the contract in weeks. Equally possible, should the 100-day simple moving average be traded through with continued strength, the market could continue to trade at price levels not seen since last autumn.

Crude Oil Apr '19 Daily Chart

Crude Oil Apr '19 Daily Chart

If you would like to learn more about energy futures, please check out our free Fundamental of Energy Futures Guide.

Request My Copy

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be 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 judgement 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.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.