April West Texas Intermediate futures rebounded early this week after sellers failed to take out the previous week’s low. Last week, the market finished with enough downside momentum to indicate sentiment had shifted to the sellers, however, the lack of follow-through to the downside drew the attention of buyers who drove the market away from a key support zone on the weekly chart.
The market is trading inside last week’s range which suggests investor indecision and impending volatility. Last week, the market finished about 10% lower. This week, it is in a position to finish about 4% higher. This is further evidence that investors are getting mixed signals from the fundamentals. This may lead to several weeks of rangebound trading.
Helping the April futures contract this week has been a weaker U.S. Dollar and a stable stock market.
The dollar traded down to a three-year low despite favorable inflation news that supported several Fed rate hikes later this year. The weaker dollar drove up demand for dollar-denominated commodities like crude oil.
A strong recovery in the stock market after last week’s volatile sessions indicated increased demand for higher risk assets and investor confidence in the economy. This helped crude oil prices because it suggested that due to economic growth, demand would remain steady.
Early in the week, investors expressed doubts about the OPEC-led production cuts surviving the onslaught of rising U.S.…