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Crude Oil Price Finding Support at 56.70: Rigs Count Data in Focus

Brent Crude Oil Calm Ahead of US Oil Rig Count Data
Brent Crude Oil Calm Ahead of US Oil Rig Count Data

Crude oil price has ticked lower on the day, but is finding support just under $56. However, there is a lack of upside momentum on the back of several fundamentals that have been pressuring WTI crude oil prices all week:

  • Higher-than-expected crude oil inventories.
  • Restoration of Saudi production
  • Stronger US Dollar on the week
  • Continued concerns for global growth
  • Dovish comments from International Energy Agency (IEA) Chief Birol.

IEA Chief Birol has hinted at a cut in the 2019 global crude oil demand forecast by the agency if further weakening of the global economic demand continues unabated. This has dampened bullish sentiment on crude oil price this Friday.

Near-term opportunities on WTI crude oil may be presented by the last pieces of data for the week: the Baker Hughes Oil Rigs Count data and the US Core Durable Goods Orders data.

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Outlook for Crude Oil Price

Crude oil price is finding support at 55.70, which is where we see a cluster of lows of the first week of March and the last week of July. There is also an ascending trendline support which intersects this line at the current support area.

A break of these support indices will open the door for price to beat a path towards 54.20 (March 8 low and neckline of double bottom of May/June 2019 in role reversal). This is also the 23.6% Fibonacci retracement from April 23 to August 7.

On the flip side, a bullish push from the New York session’s economic data would push crude oil price action towards 56.60 (August 13, 30 and 29 highs). Above this level, 58.53 (50% retracement) comes into focus. A break above 60.67 (61.8% retracement) would invalidate the near-term bearish outlook and open the door to the highs of May 2019 and last week.Download our latest quarterly market outlook for our longer-term trade ideas.

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