Weekly Stocks Data Lifts Crude Prices

Larger than expected weekly drawdowns in U.S. Crude Oil supplies helped spur a near 5% price jump yesterday. The lead May WTI futures contract broke out of a 4-week trading range settling above the $63 mark for the first time since early March. Continued weakness in the U.S. Dollar added support with the Greenback touching near one-month lows.

Source: Intercontinental Exchange, Inc.

The weekly stocks data released yesterday morning provided the biggest boost to prices. Following on the heels of Tuesday afternoon’s friendly API data that showed a -3.61 million bbl drawdown, the weekly Energy Information Administration (EIA) numbers showed even greater tightening of supply. Analysts were expecting a modest -2.2 million bbl draw but were met with a surprising -5.90 million bbl tightening. Gasoline supplies also were trimmed more than expected while Distillates posted a -2.0 million bbl draw versus a 1 million bbl expected build.

Adding to the bullish undertone in the market was the monthly global demand assessment released by the International Energy Agency (IEA). The IEA, not to be confused with the above mention EIA, raised their projection for global Crude demand. Their latest projection calls for demand to increase by 5.7 million bbl/day in 2021 to 96.7 million. This release followed suit with the OPEC+ demand forecasts calling for a rise in daily demand through 2021.

The positive outlooks are clearly tied to the expectations for continued economic recoveries throughout the world as the demand loss of the pandemic returns. Those expectations have had to deal with some recent adversity as spikes in infection rates across Europe and India have been met with renewed lockdown measures.

 

Technicals

May WTI futures have broken out above their 4-week trading range with yesterday’s surge back above the 63.00 mark. The 64.88 and 66.44 marks will offer the next resistance followed by the 67.79 top from March 8. Pullbacks will find support at 60.38 and the 57.29 old channel low. The 59-day moving average also crosses just below the 61.00 mark.

 20-Day SMA     60.35

 50-Day SMA     60.90

 200-Day SMA   48.60

 14-Day RSI        56.00

 Implied Vol       38.50%

 

CME WTI Crude Oil futures contracts trade on your StreetSmart Central platform under the symbol CL. If you have questions regarding futures trading at Charles Schwab please contact our Futures desk at 877-280-6040.

Trading Calendar Today

Jobless Claims 8:30 a.m.  ET

Retail Sales 8:30 a.m. ET

Philadelphia Fed Manufact Index 8:30 a.m. ET

Industrial Production 9:15 a.m. ET

Business Inventories 10:00 a.m. ET

Housing Market Index 10:00 a.m. ET

EIA natural Gas 10:30 a.m. ET

 

With the May contract (CLK21) fast approaching its last trading day next week on 4/20, the volume and open interest has already begun to shift into the June contract CLM21.  

 Contract specs (CLK21)

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