WTI on track for biggest weekly gain in more than 7 months

Crude oil prices’ unabated rise continued on Friday, pushing the barrel of West Texas Intermediate above the $46 mark for the first time in two weeks. At the moment, the barrel of WTI is trading at $46.16, gaining 2.75% on the day.

This week’s upsurge seems to be fueled by two different factors. One is the continuous selling pressure seen on the greenback throughout the week and the other is the supply output reaction to weak oil prices. This week’s data from the U.S. showed that crude oil output fell 100,000 barrels per day (bpd) to 9.3 million bpd last week, the biggest weekly fall since July 2016. Furthermore, Baker Hughes Oil Rig Count, which was released a little earlier in the session, recorded its first decline in 24 weeks as it fell to 756 from 758.

“Oil prices received momentum from Wednesday’s U.S. data and the market rejected the lows that we saw. It has been a bullish week for the oil market,” Michael McCarthy, chief market strategist at Sydney’s CMC Markets, told Reuters.

The barrel of WTI, which started the week at $43.16, is about to close the week $3 higher. The last time the WTI was able to gain more than $3 was in November when OPEC announced its production cut deal. 

Technical outlook

$46.70 (Jun. 12 high) could be seen as the first technical resistance for the barrel of WTI ahead of $47.40 (Jun. 6 high) and $48 (psychological level). On the downside, supports locate at $45 (psychological level/daily low), $43.70 (Jun. 28 low) and $4265 (Jun 26 low).

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