It has been a whipsaw session for WTI crude oil, with prices of June futures driving moderately higher. Friday brought extremely tight trading conditions as buyers and sellers digested the trade war developments. At press time (11:30 AM EST), June WTI futures are well off of daily highs near the $62.00-$62.25 value area.

No doubt about it, trade war fears are driving the action in markets across the board. As equities have suffered, commodities have done well. Solid gains in gold and moderate strength in WTI have been the early-week stories in commodity pricing.

June WTI Crude Oil Breaks Out Of Daily Pennant

It has been an active early week session for June WTI crude oil futures. Prices initially rallied above $63.25 before posting a large intraday retracement. As of now, it appears that the bullish breakout from the four-session daily pennant formation is being held in check. Economic concerns stemming from the U.S./China exchange of new tariffs is the primary reason for the failed bullish break.

Here are the levels to watch in this market for the near future:

• Resistance(1): Bollinger MP, $62.54
• Resistance(2): 38% Current Wave, $62.55
• Support(1): Swing Low, $60.04

Overview: At least for today, the intermediate-term bearish trend is holding strong. Trade was not able to be sustained above the 38% Current Wave Retracement ($62.55). Until June WTI can rally above this area, it will be a good idea to respect the daily downtrend of late-April.

Tomorrow afternoon brings us the beginning of the weekly inventory cycle with the API crude oil stocks report. Last week showed shrinking supplies in-line with seasonal trends. In the event supplies decrease again, WTI may be ready to begin a march back to $65.00.