WTI weaker, probing the area around $53.00

Crude oil prices are fading part of Friday’s advance today, dragging the West Texas Intermediate to the $52.70 area per barrel, just to retake the $53.00 neighbourhood afterwards.

WTI focus on data, FOMC

Prices for the WTI are once again under pressure after driller Baker Hughes reported on Friday that US oil rig count increased by 7 to 609 during last week, the highest level since October 2015.

The report added to the already heightened concerns over the likeliness that rising US production could play against the OPEC deal to cut oil output and rebalance the markets.

Adding to crude weakness, the recent build in crude inventories as reported by the API and the EIA have been weighing on sentiment and limiting gains, lifting US oil production to all time highs above 520 million barrels.

From the positioning side, crude oil net longs have receded a tad from recent record levels, although they key extreme levels above 520K contracts in the week to February 28 as the latest CFTC report.

Looking ahead, the usual weekly reports on stockpiles by API (Tuesday) and EIA (Wednesday) are due ahead of the critical FOMC meeting (Wednesday). Next week, the CERAWeek event in Houston should grab attention among markets and will surely be a source of extra volatility for crude prices.

WTI levels to consider

At the moment the barrel of WTI is losing 0.53% at $53.03 facing the next support at $52.54 (low Mar.2) followed by $51.22 (low Feb.8) and then $50.91 (low Jan.18). On the other hand, a surpass of $53.41 (20-day sma) would open the door to $54.23 (high Feb.28) and finally $54.61 (high Feb.27).