- Baker Hughes reports drillers in the U.S. added 10 oil rigs last week.
- The IEA warns over the negative impact of trade tensions on oil demand.
- WTI remains on track to close the week $1 lower.
Crude oil prices came under a modest selling pressure in the US afternoon after the weekly report released by Baker Hughes showed that drillers in the U.S. added 10 rigs last week to bring the total rig count up to 869. The barrel of West Texas Intermediate, which touched a daily high at $67.83 earlier in the NA session, returned to $67.50, where it was still up around 90 cents, or 1.4%, on the day. Despite today's recovery, the barrel of WTI is down $1 for the week.
Yesterday, the U.S. sanctions against Iran went into effect and crude oil prices gained traction as investors started to price the potential impact of a lower global supply. However, this recent recovery is unlikely to continue to gather strength in the near-term with markets remaining focused on the trade worries.
In its monthly report, the International Energy Agency (IEA) warned that trade tensions could lead to a slower economic growth, and in turn, lower oil demand. Touching on the oil market's supply side, "Maintaining global supply might be very challenging, That is due to Iran sanctions and perhaps production problems elsewhere," the IEA said.
Technical levels to consider
The WTI could face the first resistance at 68.50 (20-DMA) ahead of $69.35 (Aug. 8 high) and $70 (psychological level). On the downside, supports are located at $66.13, 65 (psychological level) and $63.60 (Jun. 18 low).
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