WTI looks to settle near $71 after finding support at $70
|- Oil rig count ticks down to 866 in the U.S.
- OPEC is reportedly looking to increase output by 500K bpd.
- OPEC and its allies to meet in Algeria on Sunday.
Following Thursday's steep fall, the barrel of West Texas Intermediate gained traction on Friday and rose to its highest level since July 11 at $71.77 as investors reacted to the Iranian crude exports falling more than initially anticipated. However, ahead of Sunday's meeting in Algeria, a Reuters report claiming that the OPEC and its allies could decide to increase the output by 500,000 barrels per day triggered a heavy sell-off and dragged the WTI to a daily low at $70.
Citing three sources familiar with the talks, Reuters said that OPEC and non-OPEC countries pumped less oil than they did in July and were planning to introduce a 500K bpd production boost.
On the other hand, the weekly report published by Baker Hughes Energy Services revealed that the number of active oil rigs in the United States decreased to 866 from 867 recorded a week ago and helped the WTI advance into the positive territory. At the moment, the barrel of WTI is trading at $71 and is up 80 cents, or 1.15% on the day.
Technical levels to consider
The initial support for the pair aligns at $70 (psychological level) before $69.30 (20-DMA) and $68.45 (50-DMA). On the upside resistances could be seen at $71.75 (daily high), $72.90 (May 22 high) and $74 (Jun. 28 high).
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