WTI extends gains above $73 after Baker Hughes reports decline in number of oil rigs

Oil rig count in the U.S. fell to 863.
ARAMCO announces output boost to counter lower supply from Iran.

Eren Sengezer FXStreet

After spending the last three days consolidating in a relatively tight range, crude oil prices gained traction on Friday and the barrel of West Texas Intermediate rose to its highest level since July 11 at $73.70. The weekly report published by Baker Hughes energy services revealed that the total number of active oil rigs in the United States declined to 863 to provide a late boost to the WTI.

"For the third quarter, the increase of five oil rigs was the smallest since drillers cut three rigs in the fourth quarter of 2017. They added 50 rigs in the first quarter and 61 rigs in the second quarter of 2018," Reuters noted.

Earlier in the day, Saudi’s oil giant, ARAMCO, announce that it would boost its oil output by 600K barrels per day to make up for the negative impact of the U.S. sanctions on Iran's supply. Although this news dragged the barrel of WTI below the $72 mark earlier in the day, it didn't take for crude oil to reverse its course as investors are looking to reposition themselves in the last day of the quarter ahead of November 4, on which U.S. sanctions against Iran go into effect.

“The market is coming to grips with the fact that the Iranian sanctions are not that far away. It’s going to tighten the market,” Phil Flynn, an analyst at Price Futures Group in Chicago, told Reuters on Friday.

Technical levels to consider

The initial resistance for the WTI aligns at $74.25 (Jul. 11 high) ahead of $75.25 (2018 high) and $76 (psychological level). On the downside, supports could be seen at $72 (psychological level/daily low), $70.80 (Sep. 24 low) and $70 (20-DMA).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD weakens toward 1.1600 as firm US data revives the US Dollar

The EUR/USD edged lower on Thursday, down some 0.21% as market sentiment remains risk averse due to the ongoing conflict in the Middle East. This and solid US economic data pushed the pair lower towards the 1.1600 figure ahead of Friday’s session.

GBP/USD drifts lower heading into NFP range

GBP/USD edged lower by 0.2% on Thursday, settling close to 1.3350 in a strained trading session that kept the pair pinned near three-month lows. Price briefly recovered earlier in the day on reports that Iran had indirectly signaled openness to talks with the CIA, but the bounce faded as Israeli officials reportedly advised Washington to disregard the overture.

Gold slumps below $5,100 as US Dollar gains

Gold price tumbles to near $5,085 during the early Asian session on Friday. The precious metal loses ground amid a stronger US Dollar. The US employment report for February will take center stage later on Friday.

NYSE parent Intercontinental Exchange partners with OKX, invests at a $25B valuation

OKX announced an investment from Intercontinental Exchange, raising its valuation to $25 billion, alongside a partnership to expand regulated crypto futures and tokenized equity offerings globally.

Two PMIs, two Chinas

China’s economic data are often treated with a degree of caution by global investors. The challenge is not necessarily that the numbers are incorrect, but that they can describe very different parts of a vast and complex economy. Nowhere is that more evident than in China’s PMIs.

Ripple tests recovery strength amid steady ETF inflows, growing retail interest

Ripple (XRP) continues to demonstrate notable resilience as the cryptocurrency market navigates the persistent war in the Middle East after the United States (US) and Israel attacked Iran on Saturday.