If the quote “the trend is your friend” isn’t the true narrative of the energy complex over the past 20 trading days, I’m not sure what other phrase may be used to depict exactly what we have witnessed. WTI crude for August delivery has had a 20.15% rally from its lows on June 12th to its highs on July 11th with only seven opportunities to buy lower on the day and watch it rally over the following days.
Whether it was the anticipation of product disruption from this year’s first storm in Hurricane Barry or the middle east tensions with Iran, the proof is in the pudding and buying the pullbacks is firmly intact as a strategy for the near term. We are keeping on eye on some major support and resistance levels at $58.54 and $61.22 to provide further conviction on direction. As of 11:11 am EST, WTI for August delivery is up $0.07 at $59.65 a barrel, HO is up $0.0116 at $1.9632 a gallon and RBOB is up $.0096 at $1.9399 a gallon. So, in the meantime, we await APIs tonight and DOEs tomorrow for a further pulse on the current supply picture across our nation. Estimates are as follows:
Crude: -3.375mil barrels
Distillates: +0.425mil barrels
Gasoline: -1.850mil barrels