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YVWAP has mostly remained in balance the last 8 weeks other than 2 instances of sell-side breakouts and a quick venture into imbalance. Both of these were short lived, and the market quickly traded back into balance with multiple mean reversions. Which is precisely where YVWAP currently continues to trade as May closed out.

From a macroeconomic perspective we have numerous dynamics in play. Ramping up of production in some of the OPEC nations recently led to record levels of production in March 2025. Further hampering prices as weakened demand for US Crude oil remains a persistent problem. US producers have recently been slowing down as rig counts were seen falling for five straight weeks. And global economic uncertainty also plagues both demand and outlook. The US administration is on a mission to continue to both increase US production whilst driving the price down. This of course it a worrisome outlook for US producers who will be unable to remain profitable if Crude trades below their BEP continuously.

Where that BEP stands much depends on the region of the US drilling and exploration, as these regions differ greatly for their BEP (Break even points). The age of the well is also of interest, new wells may require around $61 BE, and older wells being able to endure prices around $33 for BE. However, for Texas, it’s considered to be BEP of $65. Many regions in Canada can withstand BEP of $50-55. What’s clear is even if we said the average US BEP was around $56-$61, prolonged prices below $60 will not only see RC’s continue to fall, but a slowdown in US oil exploration and investment.

Lower oil prices can also be a concerning signal of a deeper global slowdown. Many headwinds remain for the Crude oil industry in the near term. And although lower prices would not be sustainable for the long term, it is very likely we will see periods of imbalance return to the technical charts. Quarterly TF has recently seen the Bears testing POC in the 56’s area. Weekly TF continues to form a larger Bearish Kumo, trading below ST EMA’s and chikou span indicates further sell-side momentum. For YVWAP. DVAL would be the next rotation on further bear momentum, acceptance there a retest of recent lows $57.74, $55.36 and possibly $55.12. Much will depend on the global trade war direction over the coming weeks, talks with China and any worsening in global outlook or Crude oil demand. These are rapidly evolving situations and commodities remain incredibly volatile asset classes that have high exposure to all of these geopolitical and macroeconomic situations.

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