Oil: WTI jumps more than 3%, erases weekly losses

Matías Salord FXStreet

Crude oil prices rose sharply on Friday. The West Texas Intermediate gained more than 3% as it climbed from under $47.00 to $48.65. The spike higher came after data showed US rig count dropped by 5 to 763.

Crude oil erases weekly losses

WTI ended at $48.60, marginally below the level it had a week ago. It erased weekly losses with the rally on Friday. On Thursday it bottomed at $46.48, the lowest in three weeks.

Turmoil in Venezuela, a relatively weak US dollar, and the Baker Hughes report pushed crude oil prices sharply to the upside on Friday. It had the best day since July 27.

The short-term momentum changed dramatically with the recent rally and now the bearish outlook that was prevailing at the beginning of the week has been eroded.

From a technical perspective, price is bouncing from the 55-day moving average. The rally stopped below a strong resistance area located in the $48.70 zone (horizontal resistance / 20-day moving average): a break higher would add strength for a continuation to the upside.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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