WTI retraces daily gains after Baker Hughes reports big jump in rig count

The number of active oil rigs in the U.S. rise to 867.
Despite today's fall, WTI looks to end week higher.
Trade headlines continue to weigh on crude oil prices.

After recording decisive gains on the back of easing trade worries and larger-than-expected declines seen in the U.S. crude oil inventories during the first half of the week, the barrel of West Texas Intermediate failed to extend its gains and fell sharply on Thursday. Although it looked like the WTI was looking to end the week near the $70 mark, it lost its traction in the last hours and was last seen trading flat on the day at $68.76.

Earlier in the day, reports of the U.S. Secretary of State Michael Pompeo willing to give a press briefing on new sanctions on Iran boosted crude oil prices amid the expectations of lower supply from the third-largest OPEC producer.

However, the weekly report released by Baker Hughes revealed that the number of active oil rigs in the U.S. rose to 867 in the last week from 860 to suggest an increase in the U.S. oil output and dragged oil prices lower.

Furthermore, Bloomberg reported that despite an attempt by the White House to restart trade talks with Beijing, President Donald Trump told aides to go ahead with the import tariffs on $200 billion worth of Chinese goods. Although it is unclear when these tariffs will go into effect, crude oil prices extended their losses.

Technical levels to consider

The first support for the WTI aligns at $68.50 (20-DMA/50-DMA) ahead of $67.35 (Sep. 10 low) and $66 (Aug. 22 low). On the upside, resistances could be seen at $70 (psychological level), $71.25 (Sep. 12 high) and $72.60 (May 21 high).

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