Oil Price - March 22

dan_s · Post by **dan_s** » Fri Mar 22, 2019 4:24 pm

WTI started the day slightly over $60/bbl, but pulled back to close at $58.93.
Today's range was $58.29 to $60.07. It did rally $0.64/bbl off the low in the afternoon.
May is now the "front month" NYMEX contract for WTI.

> Traders are still concerned about Global Growth and the unknown of the U.S. / China Tariff War
> Brexit is still a dark cloud hanging over Europe's economy
> Economic data for February is weak, but keep the impact of winter weather in mind.
> The U.S dollar was up today, which puts downward pressure on oil. See: https://www.marketwatch.com/investing/index/dxy

My SWAG:
> I bet a lot of upstream companies layed on hedges when WTI short over $60/bbl. Hedges are sales of oil futures contracts in the out months, which puts pressure on the front month.
> $60 is a psychological resistance level that will probable take several more "attacks" to be breached
> Regardless, we are definitely entering an extended period where demand for oil will exceed supply. Ultimately, falling OECD crude oil inventories will push oil prices a lot higher.