rig count

Earlier today, the Baker-Hughes Rig Count was released to the public. The number came in at 659 operation oil rigs in North America, down 11 from 670 last week. Even though we saw a temporary spike in oil prices stemming from the Iranian missile attack, producers remain bearish.  At this point, it appears that winter seasonality is kicking in.

For the session, February WTI crude oil futures are down moderately. Prices remain beneath the $60.00 psyche level and look to be entering a consolidation phase. Given this week’s large $7.00 range, one is inclined to believe that WTI has found an area of fair value between $59.00 and $60.00.

Rig Count, WTI Futures Fall

Since the 1:00 PM EST release of the Baker-Hughes Rig Count, February WTI crude has tightened near $59.25. At this point, the 62% Fibonacci retracement level ($59.07) is hanging tough as downside support.

rig count
February WTI Crude Oil Futures (CL), Daily Chart

Here are the key levels for February WTI going into Monday:

  • Resistance(1): Bollinger MP/Daily SMA,  $60.46-48
  • Support(1): 62% Macro-Wave Retracement, $59.07
  • Support(1): 78% Macro-Wave Retracement, $57.35

Bottom Line: Weekends are tricky for commodity trading, as any breaking geopolitical news can send prices GAP up or GAP down ahead of Monday. This week is no different ― if you are taking home open positions in WTI, be sure to have your leverage in check.

At this point, it is anyone’s guess which way February WTI crude oil is headed in the short-term. If prices continue to fall, a buy from the Macro-Wave 78% Retracement at $57.35 will come into play. With an initial stop at $56.99, this trade produces 36 ticks on a standard 1:1 risk vs reward management plan.

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