RJO FuturesCast

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Energies

Crude Oil Continues to Crumble

Posted 05/24/2019 10:19AM CT | Michael O'Donnell

The crude oil market this week shifted from weighing and focusing on demand concerns (related to global trade and growth) and supply concerns (related to tensions on the Middle East) to decidedly bearish on concerns for demand.

While the market looked to be in a range between $60 and $65 for the most part since early April, it seemed the market was facing a trend decision or breakout by early June, pictured in the chart below.  Also, in the chart below, the 200-day moving average and 100-day moving average were breached in this week’s trading.

Clearly, the market and chart below reflect the breakdown in trade talks and the potential for a trade deal between the United States and China as well as the build in inventories in the weekly EIA report which showed a build in crude of 4.7 million barrels as well as builds in gasoline and distillates.

Moving forward, as of yesterday and so far, today, the market has held the $57.50 level for the most part and coincides with late February and early March congestion followed by a run up and the mid November 2018 levels preceding the following sell off.

Crude Oil Jul ’19 Daily Chart

Crude Oil Jul '19 Daily Chart

Michael O'Donnell

Mike started his career in the markets on the floor of the Chicago Board of Trade as a trade checker for a local market maker in the Dow Futures pit. This led to interning with an independent introducing broker and going on to work with a number of market participants including: speculating clients, hedge clients, introducing brokers, futures commission merchants, commodity trading advisors, proprietary traders, trading educators, system creators, and a number of international financial market participants.