**Bias shift to Neutral

Yesterday’s Settlement: 64.35, down -0.81 [-1.24%]

WTI Crude Oil futures broke through key resistance mid-day yesterday as quick, headline-driven price action drove prices through the key 65.00 support level. This triggered stop-loss selling and technical liquidation, which exacerbated the move.

The headline that drove crude lower initially was pretty innocuous: a statement that Russia-US headlines were progressing. Either party’s in the know is front-running some type of Russian agreement, or the market overreacted to widely known news.

Either way, the break of 65.00 came as a surprise after holding firm the past few days. While fundamentally we view risk as skewed to the upside, the technical break throws up some red flags on our end in terms of confidence in the bullish bias.

If the Russian-Ukrainian war were to reach a ceasefire on these talks, we have little confidence that it would hold. But, the headlines alone could drive a sharp move lower in Crude as these markets have continued to trade thin and volatile around headlines. This headline risk is something to be aware of.

Yesterday’s EIA report was bullish, featuring above-estimated draws across all three major categories as US refiners continue to run hot. The EIA report was as follows:

• Crude: -3,029 vs +0 estimate

• Gasoline: -1,323 vs -1,000 estimate

• Distillates: -565 vs +811 estimate

• Refinery Utilization: +1.50% vs -0.35% estimate

• Today: 64.68 up +0.38 [+0.58%]

Prices are rebounding this morning as traders work to price in risk around the possible Trump-Putin meeting. President Trump’s push to end the war has put traders on edge this week – and markets are trading like they know something we don’t surrounding these talks.

I’d be wary of taking naked long positions at this level, as technical support has been broken and momentum is shifting away from the bulls.

Technical Analysis:

**BIAS SHIFT TO NEUTRAL

Key technical and psychological support between 65.02-64.86*** has been broken as has our confidence in the tighter trading range we had been settling into early this week.

We’re taking a neutral bias until the technical and fundamental picture is clearer. Our tilt is still fundamentally bullish in the short term, but we want to get through these US-Russian negotiations to avoid headline risk before taking another shot on the long side. 63.15*** is our next longer-term support and our longer-term pivot and point of balance.

For intraday trading, our pivot and point of balance are set at…

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