Crude oil prices gained traction in the late NA session with the barrel of West Texas Intermediate settling at $48.81, adding $0.22, or 0.45%, on the day.
Today's data released by Baker Hughes showed that the number of active U.S. oil rigs increased by 3 to reach a total of 768 this week. However, the fact that the active U.S. rigs count, which includes oil and natural-gas rigs, fell by 5 to 949, pushed crude oil prices higher. Moreover, short coverings ahead of the market close may have also contributed to this recent upsurge.
Regardless of this late recovery, the barrel of WTI lost 1.8% on a weekly basis as investors' focus remain on the OPEC production level rather than the U.S. In a recent report, Reuters noted that the OPEC and non-OPEC countries were currently producing about 470,000 barrels of oil a day above the agreed quota. Furthermore, the International Energy Agency's monthly report showed that global crude supplies increased by 520,000 barrels per day in July. Commenting on the IEA report, "many are skeptical about OPEC's discipline and today's IEA report illustrates why," said BBH analysts.
The barrel of WTI might need to make a daily close above the $50 handle in order to make a sustainable recovery. Above that level, $50.40 (Aug. 10 high), $51.05 and $52 (May 25 high) could be seen as short-term technical resistances. On the downside, supports are located at $48 (psychological level/daily low), $46.40 (Jul. 25 low) and $45.40 (Jul. 24 low).
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