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  • WTI futures’ reversal from $41 highs extends to one-week lows at $39.55.
  • US oil rigs increased by the sixth consecutive week, according to Baker Hughes.
  • Longer-term, crude prices remain moving in range around $40.

Front-month WTI futures’ reversal from day tops near $41 has extended to one-week lows at $39.55 on Friday after Baker Hughes reported that US oil and gas rigs increased to their highest level since May last week.

US oil rigs increased for the sixth week in a row

Oil prices have traded lower on Friday and are set for a weekly loss after having reached nearly two-month highs near $41 earlier this week. The release of the Baker Hughes report, stating that the number of US oil rigs increased for the sixth consecutive week, has not helped to stop the negative momentum on oil prices, which have depreciated nearly $1 so far today.

US oil drillers added six new rigs last week, to a total count of 211, in their sixth consecutive increment since having bottomed on mid-August. With crude prices steady around $40 during the last two months, oil producers seem to be restoring their production which was closed down during the first wave of the pandemic.

WTI prices remain sideways around $40

The daily chart shows WTI futures trading within a horizontal range between $39 and $42. On the downside, further decline below $39.55 session low would open the doors for the mentioned $39.00 (October 12 low) and below there, the 200-day SMA, at $37,50 might offer support.

On the upside, initial resistance would be at the confluence of the 50 and 100-day SMAS, around $40.40, and above here, $41 (October 22 high) and $42 (October 20 high).

Technical levels to watch