While WTI crude continues to face incredible volatility based off historical supply and demand destruction, it seems traders are hoping the demand recovery will be supported as cities in the states as well as Europe begin to test the waters of reopening. API data yesterday revealed a smaller than expected crude inventory buildup, traders will be watching the more highly regarded EIA report today for a smaller than expected build up in inventories, which would in all likelihood motivate buyers to step in, and sellers to cover. Despite short term rises in contract months, we think in order to see true stabilization in the price we will need to see not only demand pick up in the U.S. and Europe, but also crude storage globally have a significant down tick which will remain key.

Looking at June crude we can see support at $15.60, a break of this level may see increased sellers and thus a test of $15.10. These levels will have to hold for another leg higher in which case the first test of resistance will be at $16.25. If we can see the June contract break this with volume, along with crude data numbers to support this, the next test will be the $16.60 area. A test of these resistance areas on low contract volume and overbought RSI levels may see increased selling pressure, causing the contract to be range bound.

Crude Oil Jun ’20 60 Min Chart

Aleksandar Curic

Aleksandar’s curiosity in trading began while studying Economics at the University of North Dakota.  Ahead of becoming a Market Strategist for RJO, he directed his own independent account learning different methodologies and trader processes to further his edge before finally turning his full-time focus to the futures market.