WTI fades an uptick to $ 71.50, US rigs data in focus

• Looks to break its consolidative range to the upside, as technicals remain supportive.
• US rigs count data is likely to confirm whether WTI holds further upside?

After a phase of consolidation seen so far this Friday, WTI (oil futures on NYMEX) caught a fresh bid-wave, as the bulls attempted to take on the bounce back above the $ 71.50 barrier.

But fresh sellers ran through the barrel of WTI last minutes, knocking-off the rates back in the red zone near $ 71.30 levels. The bears continue to retain control as markets believe that alternative supplies could replace a looming drop in Iranian exports from US sanctions.

However, the losses remain limited amid renewed broad-based US dollar weakness, as Treasury yields break lower across the curve. A weaker US dollar makes the USD-denominated oil cheaper for the holder in foreign currencies.

Markets now await the US drilling activity report for fresh insights on the US crude oil supply-side scenario, which will have a major bearing on oil prices.

WTI Technical Levels

Jason Sen, Director at DayTradeIdeas.com offers his technical outlook on WTI: “WTI Crude getting overbought but no sell signal as we work towards the 500 week moving average at 7300/7320. Might be wise to lighten up on longs before the weekend, but do not even think about shorts - wait for the sell signal. First support at 7100/7090 then better support at 7050/40. Unlikely, but further losses could reach 6990 before a buying opportunity at 6955/45.”