WTI crude oil futures settle at $58.43

Plus $2.33 or 4.1%

The price of WTI crude oil futures are settling at $58.43. That is a gain of $2.33 or 4.1%. The move higher today was helped by a bigger than expected drawdown of inventories of -4856K versus -1500K estimate.  News that Saudi Arabia is is threatening to keep production higher to punish producers who don’t keep to their quotas had little impact.
Plus $2.33 or 4.1%
Looking at the 60 minute chart above, the contract spiked above its 100 hour and 200 hour moving averages (blue and green lines) and extended up to the recent highs over the last 9 or so trading days between $58.67 and $58.74. The high price today reached $58.66. The low for the day was down at $56.28.
A move above this ceiling would be more bullish for the contract. Staying below, and we could see a rotation back down toward the 200 hour moving average of $57.46.

Global growth worries continue to weigh on oil

This selloff is getting ugly

This selloff is getting ugly
WTI crude is now down nearly 4% on the day as gloom about the global economy sets in.
The big news this week was OPEC but they did as much as could have been reasonably expected by extending cuts for 9 months. This may be a sell-the-fact trade but it looks more like the market is jittery about demand.
The US Treasury market is sending the same worrisome signals today, despite the China-US truce.
One worry is that Trump’s administration announced fresh European tariffs yesterday. The amount of goods overall is small but it’s moving in the wrong direction and a US-Europe trade war would sink growth expectations once again.
The chart doesn’t look great as we top out well-ahead of the previous highs.

IEA cuts 2014 global oil demand forecast by 60k to 1.29mbpd

  • Cuts 2014 forecast for non OPEC oil supply growth by 250k to 1.5mbpd
  • Lower Russian projections drive estimates lower
  • OPEC crude supply fell in March by 890k to 29.62mbpd on Iraq, Libya & Saudi
  • Says market balances indicate OPEC will need to raise output in second half of year
  • OECD commercial oil stocks fell by 6.5m in Feb to 2.567tn barrels

Brent crude has been looking slightly cheaper on the cut in demand forecast and the 108.30/50 level is still the level that needs to be broken for a push up.