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Fundamentals

During the Asian session on Monday (June 26th), WTI crude oil fluctuated in a narrow range and is currently trading around $69 per barrel. Last Thursday and Friday was the Dragon Boat Festival holiday in China, and the amplitude of international oil prices during this period was still violent, with reversals and reversals occurring frequently. Before the holiday, oil prices still climbed positively, reaching a high of around 72.7. Oil prices fluctuated at high levels on Thursday afternoon, after which they began to plunge sharply, falling as low as around 67.3 on Friday, infinitely approaching the last low. Oil prices formed a five-fold bottom around 67, then began to rebound, reaching a high of around 70.5, which was also the center of the previous oscillation, and currently retraced to around 69. In general, the fluctuation of the oil price is quite large. Over the weekend, Russia's "civil unrest" was quelled in one day, and oil prices also open gap up today, but with no volume and momentum. Perhaps oil prices will be more volatile in the 68.5-70.5 range in the short term.

Data: The number of active US oil rigs, a measure of future production, fell six this week to 546, the lowest level since April 2022. The preliminary Markit manufacturing PMI in the US for June was 46.3, lower than the expected reading of 48.5 and the previous value of 48.4. The preliminary Markit services PMI for June was 54.1, compared with 54 expected and 54.9 previously.

Inventories: US crude oil inventories, including strategic reserves, totaled 813.26 million barrels in the week ended June 16, 2023, down 5.55 million barrels from the previous week. US commercial crude inventories were 463.29 million barrels, down 3.83 million barrels from the previous week. Strategic crude oil inventories were 349.97 million barrels, down 1.72 million barrels from the previous week. US gasoline inventories totaled 221.4 million barrels, up 480,000 barrels from the previous week. Commercial crude oil inventories were 10.57% higher than in the same period last year and 0.72% lower than in the same period in the past five years. Gasoline inventories were 1.11% higher than the same period last year and about 7.15% lower than the same period in the past five years. Distillate inventories were 4.05% higher than in the same period last year and 14.16% lower than in the same period in the past five years.

Technical Analysis

Trading at the daily timeframe, the MA5, MA10, and MA20 are directly glued together. The MA5 also began to cross the MA10 and the MA20 around 70.3, so that oil prices will remain dominated by weak shocks. US crude opened slightly higher to 70.5 in early trading and is now trading around 69. According to this trend, crude oil is expected to fluctuate during the week. Unless the daily line opens, oil prices will not be able to express unilateral strength. The large range will remain between 72.8-67.2, and the small range is 68.5-70.5.

Traders are advised to buy low and sell high during the day. Taking short positions until oil prices rebound to around 70.5. The stop loss is set around 71.5, the first target of take profit is at the 69.5 line and look at the second target of the 68.5 line after setting the position to break even. Traders can seize the opportunity to go long when the oil price retraces to around 68.5, with the stop loss setting at 67.5. The first target of take profit is 69.5, and after setting the position to break even, look at the second target of 70.5.

Trading Recommendations

Trading Direction: Long

Entry Price: 68.500

Target Price: 70.500

Stop Loss: 67.500

Support: 68.500/67.300

Resistance: 70.500/72.500