Trading position (short-term; my opinion; levels for crude oil’s continuous futures contract): Those entering the market now can do so by holding long positions with entry at $63-63.5, with $59.7 as a stop-loss and $68.20 as the initial price target.

Dear readers:

Today’s regularly scheduled full Oil Trading Alert will be published tomorrow. In the meantime, I’m sending you a quick market update.

A consistent uptick in economic activities in the US, UK, China and some European nations is in stark contrast to near emergency shut down situations in India and Japan, leading crude to move in a tight range at around $65 levels.

Oil Market: Key Updates

• There has been a steady m-o-m increase in crude oil refining in China with the latest number being 14.1m b/d for the month of April. This is despite seasonal refinery maintenance.
• Similarly, the US is on an upward rise in terms of daily air passengers with TSA reporting 1.85m passengers on Sunday, May 17.
• India’s oil demand is shrinking as most parts of the country are under local lockdowns. Daily new cases are coming down; however, experts are still concerned about the high positivity rate.
• The UK opened for business after a four-month COVID-19 lockdown. France and Spain have eased COVID-related restrictions in the past days with accelerating vaccination rates.

In the absence of any strong indicator, oil is expected to continue displaying a range-bound behavior for the coming days.

Note: Our trading positions remain the same.

Thank you.

Nishant Jain, MBA, CPSM
Oil Trading Strategist