WTI Crude Oil Futures (February)

Friday’s Settlement: 73.96, up +0.83 [+1.13%] for the day, up +3.36 [+4.76%] for the week

WTI Crude Oil futures finished the week strong, making two-month highs at 74.35 and settling above our major three-star resistance level of 73.84***. Driving Friday’s move in crude was a general risk-on move in markets and low U.S. inventory levels revealed by Thursday’s EIA report.

On Friday, the U.S. Dollar Index finished the day lower by -0.42% which was mainly driven by a rebound in the Euro and British Pound. U.S. equity futures moved markedly higher, snapping a five-day losing streak while bonds weakened with 10 10-year yields moving up to 4.56%. Gold moved lower by -0.70% while Silver moved higher by +0.17%. Natural Gas moved lower by -8.06% after forecasts showed less aggressive cold shots coming through for next week and the weekly EIA Gas Storage report showed lower draws than estimated.

There are signals that heightened sanctions on Iran and Russia are starting to take hold on crude markets, as Middle Eastern regional benchmarks moved higher than the Brent contract. This is a rare move and a bullish signal that should be noted by traders.

Today, futures are up +0.55 [+0.74%] to 74.51

The macro environment is trading risk-on this morning, driven by a sharp move lower in the dollar. The U.S. Dollar Index is lower by almost a full -1% after the Washington Post released a story that Trump will dial back on his tariff plan. Equities, gold, and crude oil are all sharply higher on the news while interest rates moved lower.

Outside of the Dollar move, Saudi Arabia hiked the price of its main Arab Light crude by 60 cents for Asian buyers. This follows the jump in Oman and Dubai prices noted above.

Technical Analysis

The crude strength continued strong on Friday, ripping through and settling above our key three-star resistance level of 73.84***. Today, crude is moving sharply higher once again and has made a high of 74.66 on the WAPO story about Trump’s team dialing back tariffs. Gold made a strong move higher off the WAPO story as well which has been totally retraced with gold making new intraday lows at this point. Trump has put out on Truth Social that the WAPO story is fake-news here into the U.S. Open.

Volatility around tariff rumors, tweets, and Trump comments will likely be commonplace here at the start of the administration and traders should keep their head on a swivel for random volatility and sharp reversals throughout trading sessions.

A settlement above….

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