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As crude oil prices reached their largest monthly drop since 2021 (Brent losing 15.4% & WTI 17% since start of April) on fears the US trade war was going to impact economic growth now coming to fruition. Paired with Saudi signalling further increase in output and a willingness to endure lower prices. Iraq, UAE and Kazakh also boosting output adding further imbalance to a now shattered Oil trade.

Eyes will be on the OPEC meeting May 5th where it’s rumoured Saudi will push for more production increases, (by 400,000 bbl pd) as the USA saw it’s first contraction in economic growth in three years. And China also battling contracting manufacturing activity at the most aggressive pace in almost 16 months. With warnings of further pain ahead amid ongoing tariff war. Inventory remains tight in the US, and this would be a bullish factor was it not for output and tariff situations changing the course of play.

The war in Ukraine has also been a dominating factor for Oil prices. An end to the war could see Russian oil and gas exports opened back up the West and sanctions removed. Further exacerbating the global supply in an environment where demand is softer if economic slowdown continues.  Where inventories are tight it would however ease those supply chain pressures. Overall, in the current economic climate this would likely be an added downside price pressure. 

The biggest players in the energy markets and crude markets are mostly sitting out on the sidelines after incurring massive losses over recent weeks. Oil has also suffered a heavy rotation out of the Crude trade as more traders and funds piled into the already over crowded Gold trade over recent months.

Many commodities HF that were heavily net long in what was an ever increasingly bullish market have been crushed by one fundamental situation changing the entire state of play. Technical traders are currently hanging in these markets with the most conviction and are less concerned with the physical aspects. So from a technical standpoint lets take a look at Brent Weekly & WTI ….

Brent WKLY took out March 2021 lows and since bounced back up before being swiftly rejected at a $68 handle 8EMA WKLY, Kumo remains bearish as does PSAR. We are off the week’s lows finding short term SUPP. The HTF outlook technically looks bearish. And further downside momentum is indicated within those HTF. Acceptance of $58 handle we should expect a heavy drive down to

And WTI WKLY is similar picture of major SUPP being broken causing powerful leg down. Trading below most short term EMA’s, Kumo is bearish, PSAR also remains bearish and momentum indicates further downside on the HTF. LTF have seen a nice rally with current RES across YVWP to MVWAP and volume charts at various VWAP deviation bands. LTF near term upside with multiple key risk levels ahead. Trading could become volatile going into OPEC’s meeting. $60 would be the handle to accept to see building upside momentum. Acceptance of $54 handle i would expect heavy sell off to a possible $50 handle. Heavy SUPP at $54 on a Monthly TF.

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