North American Oil Rig Count Falls Once Again
Shain Vernier • 1 min read
June WTI futures are in the green for the third straight day following Tuesday’s epic meltdown. Prices have rallied above $16.50 as energy traders try to figure out the supply/demand dynamic for the coming months. Traditionally, WTI is on the cusp of the spring buying season. However, the COVID-19 pandemic has destroyed the demand for refined fuels and sent the North American oil rig count plummeting.
Although not as severe as last Friday, the Baker-Hughes Rig Count has once again come in negative. Total North American rigs in operation counted 465, down 64 from last week. Without question, the fracking and shale oil industries are in big trouble as sub-$20.00 oil threatens to become the new norm.
Despite today’s oil rig count, June WTI futures are trading near a critical technical level. If we see WTI close the week on a positive note, there may be some short-term relief on the horizon.
Baker-Hughes Oil Rig Count Suggests That There’s No End In Sight
Unless you’ve been living under a rock (or in quarantine!) for the past week, you’ve heard all about Monday’s crash in May WTI crude oil futures. At one point, prices fell to $-37.00 per barrel. Tuesday brought more pain, as June WTI posted a low of $6.50. Without a doubt, books will be written about the wildest 48-hour period in the history of global oil.
Here are three levels to watch in June WTI:
- Resistance(1): Psyche Level, $20.00
- 2-Way Catalyst: 38% Fibonacci Retracement, $16.68
- Support(1): Psyche Level, $10.00
Overview: Following today’s oil rig count, my technical outlook for June WTI isn’t all too sophisticated. Big-round-numbers will play key roles, but the trend is definitely bearish. However, if the 38% Retracement is taken out to the topside, a swift test of $20.00 or even $22.50 is possible for early next week.