Crude Oil Futures (September Futures)

Yesterday’s Settlement: 66.71, up +1.55 [+2.38%]

Market Movers:

• US – EU Trade Deal

• Russian Sanction Threats

• US – China Progress

Crude posted it’s best day since July 11th yesterday. On Sunday the US and EU inked a trade deal that included the purchase of US energy products at scale. Meanwhile, US trade representatives continued their negotiations with Chinese delegates with the consensus being that a delay to the US China tariffs will be issued.

On the China front, progress seems like it’s being made. If US – China relations start trending back positive, it is a significant shift in the global macroeconomic back drop.

Later in the afternoon, President Trump came out of left field to threaten secondary sanctions on Russia if a ceasefire wasn’t agreed to in 10-12 days. The move, coming after a weekend alongside EU leaders, strengthens the idea that the EU will continue to shift energy reliance to US oil, products, and LNG.

Traders should note the sharp turnaround in the Dollar, which posted outsized gains after the deal yesterday. As we said yesterday, a snapback in the Dollar could become a headwind to the commodity rally we’ve seen of late.

Today, futures are trading +0.42 [+0.65%] to 67.14

Market Movers:

• Russia Sanction Threat

• OPEC+ JMMC News

• Houthi Rebels

Crude is trading higher this morning on a continuation trade from yesterday as traders try and price in the additional bullish catalysts (Russia, EU).

A headwind to the bullish run is this weekends JMMC meeting for OPEC+. The group is likely to push for another outsized production hike. While these production hikes will keep a lid on any exponential bull-run (for now), it’s a continued sign that demand is running much better than anyone had anticipated.

The global economy has proven itself incredibly resilient over the past two years and it’s clearly apparent in the continued demand for crude oil.

Data Releases: N/A

Technical Analysis:

September futures got out above yesterday’s high early this morning and a breakout looks probable towards our key resistance level of 

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