WTI pares daily gains on rising US oil rig count, remains positive on week

Crude oil prices lost traction in the late NA session on Friday, with the barrel of West Texas Intermediate turning negative below the $52 handle. As of writing, the barrel of WTI was at $51.50, losing 0.15% on the day. 

According to the data released by Baker Hughes, the number of oil rigs operating in the U.S. rose for the first time in three weeks, bringing the total number up to 750. Moreover, earlier in the session, the U.S. Energy Information Administration published a report which highlighted that the U.S. crude oil production in July increased by 141,000 bpd to a 9.24 million barrels day in July.

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Nonetheless, crude oil's retreat on Friday wasn't sharp enough to suggest a fundamentally driven drop and it looks more like a technical correction. In fact, on a weekly basis, the barrel of WTI is on track to record its highest closing in more than five months. 

In the meantime, the political tension over the Kurdish region’s independence referendum in Iraq continues to threat country's ability to export crude oil. Commenting on the situation in Iraq, “no rapid solution to the crisis can be expected, which should continue to lend support to the oil price,” Carsten Fritsch, an analyst at Commerzbank in Frankfurt, told Reuters.

Technical outlook

On the upside, the barrel of WTI could encounter the first hurdle at $52 (psychological level) ahead of $52.85 (Sep. 28 high) and $53.75 (Apr. 12 high). On the flip side, supports align at $51.20 (Sep. 28 low), $50 (psychological level) and $48.85 (50-DMA).