Asian traders reacted to a drop in US oil rig count by sending Brent oil prices above $39/barrel levels, the highest since Dec 11, 2015.
Trades above 100-DMA
Prices are trading above 100-DMA for the first time since July 3, 2015. A Baker Hughes report released in the late NY session on Friday showed the US energy firms cut oil rigs for an 11th week in a row to the lowest level since December 2009.В
Furthermore, investors are also focused on the possibility of OPEC and non-OPEC producers signing a production freeze accord at the planned meet on Mar 20th.В
Consequently, both benchmarks – WTI and Brent – edged higher by at least 1.5% each.В
Brent Technical Levels
Brent futures currently trade around $39.45/barrel. The immediate hurdle is seen at $40 (psychological figure), which if taken out could see prices test supply around $42.19 (Aug 24, 2015 low). On the other hand, a break below immediate support at 38.91 (100-DMA) could see futures drift lower to 36.14 (Jan 29 high).