The weekly Baker-Hughes U.S. crude oil rig depend has are available in at 405, up by 8 from final Friday. Nevertheless, the summer time rush for North American crude oil producers could also be short-lived. WTI costs are down once more in the present day, buying and selling close to the $62.50 space. August has been the worst month for WTI and USOIL since March 2020.
As soon as once more, the drivers of this week’s 8+% loss are twofold. First, the worldwide demand outlook is weakening as a result of Delta variant. Second, the USD continues to carry its floor amid discuss of Fed QE tapering. For those who issue within the approaching fall and winter seasonality of WTI, then it’s affordable to take a intermediate-term bearish stance towards crude oil.
From a long-term technical perspective, a bullish bias towards WTI and USOIL stays warranted. Costs are holding above the 38% Fibonacci retracement of 2020’s low to 2021’s excessive; however, the 38% retracement of November 2020 low to July 2021 excessive is being challenged. This can be a key degree to observe for USOIL and is available in at $60.42. So long as the $60.00 space holds up as assist, a month-to-month bullish bias is warranted.
For sure, these working the North American oil rigs are cheering for bids at $60.00.
U.S. Oil Rigs Up 8, WTI Crude Oil Down Almost 2%
It’s vital to respect the depth of August’s dump. USOIL is down almost 16% in its worst month-to-month displaying since March 2020’s COVID-19 panic. If $60.42 falls, then we’re possible headed to $55.00 in brief order. Ought to this state of affairs unfold, in the present day’s uptick in oil rigs will appear a bit untimely.
Overview: Proper now’s a complicated time to be buying and selling crude oil. Though the intermediate and long-term technicals present uptrends, the basics say in any other case. The keys to grease costs are the Delta variant and USD energy.
If we see late-2021 Fed tapering, coupled with U.S. Delta variant lockdowns, costs will plunge in a short time. Sadly for this summer time’s new oil rig startups, the result could possibly be catastrophe.