WTI bounces off lows near $58.60 ahead of US oil rig count

• Prices of the WTI trim earlier losses and approach $60.00.
• The EIA reported a nearly 7.3M barrel drop in crude supplies.
• Baker Hughes will release the weekly US oil rig count later.

Prices of the West Texas Intermediate (WTI) manage to garner some buying interest at session lows in the $58.60 area on Friday.

WTI now looks to Texas, data, OPEC+

The barrel of WTI regains the key $60.00 mark and above following an earlier drop to the sub-$59.00 yardstick.

In fact, prospects of a gradual normalization in the oil industry in Texas following the recent cold snap added some downside pressure to crude oil prices during early trade. The knee-jerk appears supported on the back of the likely increment of oil production by the OPEC+ starting as soon as in April. In the same line, the overbought condition of the commodity lent wings to the corrective downside.

On the supportive side of prices, the EIA reported on Wednesday a nearly 7.3M barrels drop during the previous week, adding to the pullback in stockpiles reported by the API on Wednesday.

Later in the session, driller Baker Hughes will publish its weekly report on US oil rig count.

What to look for around WTI

Prices of the West Texas Intermediate came under pressure following fresh 13-month peaks above the $62.00 mark. Increasing inflows into commodity-based ETFs have been supporting the rally in crude oil along with the persistent drop of US crude oil supplies and freezing weather conditions in Texas, all amidst the favourable context for riskier assets coupled with dollar weakness. In addition, the firm growth prospects in China add to the acceleration of the vaccine rollout in Europe/rest of Asia and morph into rising expectations of a strong rebound post-coronavirus pandemic.

Eminent issues on the back boiler: Higher crude oil prices favour US shale growth. Demand-supply balance could prompt a moderate correction lower later in the year.

WTI significant levels

At the moment the barrel of WTI is losing 0.06% at $60.22 and a breach of $58.60 (weekly low Feb.19) would expose $57.43 (low Feb.12) and then $51.66 (monthly low Feb.1). On the upside, the next resistance is located at 62.25 (2021 high Feb.18) seconded by $65.62 (2020 high Jan.8) and finally $66.58 (2019 high Apr.23).