WTI steadies above $58, looks to erase nearly 7% this week
|- WTI remains on track to post largest weekly loss of 2019.
- Active rig count in the U.S. drops to 797.
- Heightened tensions in the Middle East limit losses.
Crude oil came under heavy selling pressure in the second half of the day and lost more than 5% on Thursday after losing more than 2.5% on Wednesday. Following the sharp drop to the lowest level since mid-March at $57.32, however, the barrel of West Texas Intermediate staged a modest recovery on Friday and was last seen trading near $58.30. For the week, the barrel of WTI is down $4.4, or 7.1%.
With the U.S.-China trade conflict heating up throughout the week, investors continued to price the potential impact of a weaker global economic growth on the oil demand outlook. Additionally, the API's and the EIA's weekly reports both revealed larger-than-expected buildups in crude oil inventories in the U.S. to further weigh on the commodity. The last data of the week from the U.S. showed that the total number of active oil rigs dropped to 797 last week from 802.
"U.S. businesses affected by the increased tariffs will be making decisions regarding purchases, inventories, etc., that are apt to force some downshifts in the U.S. economic growth path that could have implications for U.S. oil demand," Jim Ritterbusch, president of Ritterbusch and Associates, told Reuters.
Meanwhile, U.S. President Trump today announced that they will be sending about 1500 troops to the Middle East after Pentagon said that Iran's revolutionary guards were directly responsible for attacks on tankers off UAE, suggesting that the tension in the area is likely to remain escalated in the near-term, which could continue to limit oil's losses.
Technical levels to watch for
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