Oil and gas exploration and production companies are slated to lose a staggering $1 trillion in revenues in 2020. The industry, which includes oil majors, made $2.47 trillion in revenues globally last year. But this year it’s projected to bring in $1.47 trillion, reflecting a 40% decline year-on-year.
This comes as the coronavirus pandemic and ensuing lockdowns cripple demand and force companies to slash spending and cancel projects. Before the virus began to hit economies, revenues for 2020 were expected to reach $2.35 trillion. Returns for 2021 are now also projected lower, at $1.79 trillion compared to a forecast of $2.52 trillion before the pandemic.
Crude Oil Inventories reported on Wednesday rose LESS THAN forecasted. A 9M Barrel build as opposed to a predicted 11.2M Barrel build. This, in conjunction with the talks of a soft reopenings for economies around the world and the OPEC+ deal cuts going into effect May 1, prices have started to rally
Jobless claims continue to rise. New claims reached 3.84 million last week, bringing the total to 30.3 million for the last six weeks. The number of total claims makes this the worst unemployment crisis in United States history. The greatest consumers in the world are jobless and confined. To see these weekly jobless claims begin to reverse would give crude oil a great boost!
CLM20 has been Blacklisted, I spoke with TradeStation to try to get some clarification as to when client’s will be able to trade the front month CL contract again – the June CLM20 Contract has been blacklisted due to last week’s little adventure into the negatives. The July contract CLN20 is able to be traded today and as long as the market remains stable moving forward it will be able to be traded as the “front month” after the June contract expires.
Long-Term MONTHLY Price Outlook
The $12.00 price area can potentially absorb annual selling pressure, above which the mid $29.00 price area remains a several week target, the $57.00 price area is potentially in reach over the next several months.
Upside, the mid $29.00 price area can absorb buying pressure through the remaining May trading sessions, with a daily settlement above the mid $29.00 price area indicating a good annual low has been placed.
The $57.00 price area then becomes a several month target where the broader market can potentially place this calendar year’s high.
Downside, a daily settlement below the $12.00 price area will most likely yield a single digit or even a potentially negative price area retest within several days to follow.
Mid – Term WEEKLY Price Outlook … 4 / 27 – 5 / 1
The main trend remains bearish according to the weekly swing chart.
A trade through the $6.00 price area will signal a resumption of the downtrend.
The main trend will change to bullish on a trade through the last main top at the $55.00 price area. However, this is extremely unlikely.
The minor trade range is between the $34.00 price area to $6.00 price area.
It’s 50% level or pivot point is at the $20.00 price area.
The short-term trade range is between the $55.00 price area to the $6.00 price area.
It’s 50% level comes in at the $31.00 price area.
The main trade range is the $64.00 price area to $6.00 price area.
It’s 50% to 60% retracement zone which is between the $35.00 price area and the $42.00 price area serves as a major price resistance.
Weekly Technical Forecast
Based on last week’s price action, the direction of the June WTI crude oil futures contract for the week-ending May 1 is likely to be determined by trader reaction to a downtrending angle at the $15.00 price area.
Weekly Bullish Scenario
A sustained move over the $15.00 price area will indicate the presence of buyers.
If this move creates enough upside momentum then look for a surge into the minor pivot at the $20.00 price area.
Since the main trend remains bearish, sellers are likely to come in on the first test of this level.
In attempts of the bears trying to overtake it, could potentially trigger an acceleration to the upside with the next major target coming in at the $31.00 price area.
Weekly Bearish Scenario
A sustained move under the $15.00 price area will signal the strong return of sellers.
The daily chart indicates there is plenty of room to the downside with the next downtrending target angle coming in at negative price areas.
Short – Term DAILY Price Outlook … May 1, 2020
For Friday, the $12.00 price area remains a long-term support level that can absorb not only daily selling, but also selling pressure throughout the balance of May’s trading activity as long as the market continues placing weekly and monthly settlements above the $12.00 price area.
The next several weeks are likely to yield an upside potential of testing the $30.00 price area.
Upside today, the $19.00 price area most likely contains initial strength, beyond which the $24.00 price area is able to contain the balance of the session’s strength.
A settlement today above the $24.00 price area indicates potentially reaching the $30.00 price area within several days.
Downside today, a weekly settlement below the $12.00 price area allows a further fall to the single digit price area within days.