Oil edges higher as rig count drops; bulls test 200-hour cap near $59
Crude futures settled at $58.65, up 1.21%, after reclaiming the 100-hour moving average. A 12-rig slide in U.S. oil drilling added a modest supply tailwind, but resistance at the 200-hour MA and a nearby broken trendline continues to curb upside momentum.
Choppy session, constructive tone
Crude traded in a tight $57.66–$58.69 range, with dip buyers defending intraday weakness and nudging prices back above the 100-hour average around $58.24. The move steadied short-term momentum, yet the market remains capped below the 200-hour moving average at $59.01 and the underside of a previously broken trendline near $59.30. Those levels remain the near-term pivot for trend conviction.
Technical setup traders are watching
The latest bounce marks an incremental improvement in structure, but not a full trend shift. Yesterday’s rejection at the underside of the broken trendline reinforced seller interest and set a clear ceiling. A decisive push through $59.01–$59.30 would tilt the bias meaningfully higher, while failure to clear that zone risks another fade back into the mid-$58s or toward $57.66 support.
At a glance
- Settlement: $58.65 (+$0.70, +1.21%); intraday range $57.66–$58.69
- Back above the 100-hour MA (~$58.24), but still below the 200-hour MA (~$59.01)
- Broken trendline resistance sits near $59.30; a key inflection for bulls
- U.S. oil rig count fell by 12, a medium-term supportive signal for supply dynamics
- Bias turns more constructive only on a sustained break above $59.01–$59.30
Macro take: range rules, but supply impulse helps
Risk sentiment remains cautious, keeping crude in a range as traders weigh softer supply signals against lingering growth concerns. The drop in active oil rigs hints at potential moderation in U.S. output growth over coming months, which typically proves supportive on the margins. For FX, oil-sensitive currencies will watch the $59 zone closely: a breakout could underpin commodity-linked peers, while a rejection may keep them tethered to broader risk and rates dynamics.
What to watch next
– A daily close and follow-through above the 200-hour MA and $59.30 trendline to confirm bullish momentum.
– Weekly supply updates and inventory data for confirmation of tightening signals.
– Cross-asset cues: front-end yields, USD tone, and risk appetite that often sway energy demand expectations.
As BPayNews notes, the market’s tone has improved, but the burden of proof still sits with the bulls until key resistance gives way.
FAQ
Where did crude settle and what drove today’s move?
Crude settled at $58.65, up 1.21%. The rebound above the 100-hour moving average helped stabilize price action, while a 12-rig drop in U.S. drilling added a mild supply-supportive backdrop.
Which price levels matter most right now?
The 200-hour moving average near $59.01 and a broken trendline around $59.30 are the key resistance markers. Support sits around the 100-hour MA near $58.24 and the intraday low at $57.66.
What would flip the bias convincingly bullish?
A sustained break above $59.01–$59.30, ideally on stronger volume and a daily close, would suggest upside momentum is reasserting and open the door to higher ranges.
How does a falling rig count affect prices?
A lower rig count signals potential for slower future supply growth. It doesn’t immediately tighten the market, but it tends to be supportive for prices over the medium term if the trend persists.
What are the implications for FX traders?
Oil-sensitive currencies typically draw support from firmer crude. A clean breakout above the $59 zone could bolster commodity-linked FX, while a rejection at resistance may leave them more driven by broader risk and interest-rate moves.
