Baker Hughes rig count for the current week shows another gain:
Oil rigs 672 from 662 last week. Up 10
Gas rigs 165 vs 160 last week. Up 5.
Total rigs 839 vs 824 last week. Up 15 for the current week
The price of oil is up $0.47 to $52.17. That is a gain of +0.93%. The high reached $52.94. The low $51.49. Key support for oil is around the $51.00 level where the 100 day MA and the 50% of the move down from February high comes in.
The gains today are on the back of the geopolitical unrest from the US Syrian attacks. This week inventories was higher than expectations. Rigs are still rising are negatives but is not having a huge impact.
Total rigs rose by 15 in the current week to 824 from 809.
Oil rigs contributed +10 of that 15 to 662 vs 652 last week
Gas rigs added 5 to 160 from 155 last week.
It was the 11 straight week with increased oil rigs.
This has been the best quarter addition since the 2nd quarter of 2011.
Crude oil is little changed (actually up a few cents) after the report.
The price this week bottomed at $47.01 on Monday. The high was reached today at $50.56. Technically, the price moved back above the 100 and 200 hour MA AND the 38.2% of the move down from the Feb 23rd high at $50.04.
One of the big downside risks for 2017 oil was Libya raising production
Libya is exempted from the OPEC quotas because it’s oil production has been ravaged by war. The situation has slowly improved in the country and months ago, government oil officials there said doubling, or even tripling production was as easy as ‘flipping a switch’.
It turns out that’s not the case.
They declared force majure on loadings from the Zawiya terminal and that’s helped to give oil a boost to session highs — up 2%.
The failure of the Fed to signal an increased pace of normalization and the prospects of other central banks raising rates spurred dollar losses, which deteriorated its technical outlook.
The Dollar Index has been sold through the 61.8% retracement (~100.40) of the rally since February 2 low near 99.25. If the 100-level is breached now, a return to the early February low, looks more likely.
That 99.25 area is very important from a technical perspective. It corresponds to a 38.2% retracement of the rally since last May’s low and it is also a neckline of the old head and shoulders pattern. The measuring objective of the head and shoulders pattern is near 94.75, which is just above the 61.8% retracement of the rally since last May’s low. The five-day moving average is below the 20-day average for the first time in a month. Technical indicators are also aligned favoring the downside.
The euro appears set to test the early February high near $1.0830, which also corresponds to the 50% retracement of the losses since the US election (~$1.0820). The spike from the December ECB meeting was near $1.0875. The 61.8% retracement of losses since the US election is roughly $1.0935. Technical indicators favor additional gains, though the proximity of the upper Bollinger Band (~$1.0750) may deter new aggressive buying before a pullback.