WTI struggles to recover losses despite decreasing oil rig count in US

Crude oil prices didn't show a significant reaction to this week's Baker Hughes report with the barrel of West Texas Intermediate consolidating its daily losses a little above the $63 mark. As of writing, the barrel of WTI was trading at $63.35, losing nearly 1% on the day.

General Electric Co's Baker Hughes energy services firm on Friday said that the number of active oil rigs in the U.S. declined to 747 from 752 for the week ending January 19. Although this data could be taken as an early sign of the oil production in the U.S. losing steam, investors are likely to expect the shale output to continue to increase as long as prices remain elevated. In fact, yesterday's EIA report revealed that the weekly production in the U.S. rose by 258K barrels. 

Moreover, OPEC's monthly report, which was published earlier this week, highlighted that the organization was forecasting the oil supply from non-OPEC producers to grow in 2018.

Reporting on today's data, "analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week slightly increased their forecast for the total oil and natural gas rig count to an average of 1,004 in 2018 and 1,128 in 2019. Last week, it forecast 996 in 2018 and 1,126 in 2019," Reuters noted.

Technical levels to consider

The first significant hurdle for the barrel of WTI aligns at $64.90/$65.00 (Jan. 15 high/psychological level), where the latest rally encountered a stiff resistance. Above that level, $66 (psychological level) and $66.90 (Dec. 5, 2015, high) could be seen as next resistance levels. On the downside, supports are located at $62.85 (daily low), $61.80 (Jan. 9 low) and $61 (psychological level).