Despite the US Dollar and Treasury yields experiencing a surge, crude oil experienced a rally leading up to Thursday. This rebound was assisted by comments made by Abdulaziz bin Salman, Minister of Energy in Saudi Arabia. In his statement, he warned that speculators are a consistent presence in any market and will inevitably experience losses. He cited an example of their losses in April and advised them to be cautious moving forward. Though not a poker player himself, he issued a warning to those who may underestimate the volatility of the market.
In April, OPEC+ revealed their decision to decrease production by 1.1 million barrels per day, leading to a surge in crude prices that reached levels not witnessed since November 2022. It is widely known that OPEC+ has a reputation for being unable to fulfill their production goals and frequently exceeding them. Those interested in exploring the OPEC+ cartel and its motivations may wish to consult Ilya Spivak’s MacroMoney show on tastylive.
The US Energy Information Agency (EIA) has recently released its weekly data, showing a significant decrease in stockpiles by 12.456 million barrels in the week ending May 19th. This drop overcompensated for the previous week’s increase of 5.04 million barrels.
The Canadian wildfires have seemingly been contained to some degree, with reports indicating that production and supply have resumed normal levels. Presently, it appears that the short positions have been squeezed, however there seems to be a dearth of follow-through at this juncture.
WTI CRUDE OIL TECHNICAL ANALYSIS
WTI has surpassed resistance and reached a peak of 74.73 overnight. The market is currently facing potential resistance from the 34- and 100-day Simple Moving Averages (SMA), which are located at approximately 75.15 and 76.92, respectively. Conversely, previous resistance levels may offer support as the market dips towards 73.60. The market may also find support at various breakpoints and prior lows, including but not limited to those at 69.41, 66.82, 66.12, 64.36, 63.64, and 62.43.