Baker Hughes report for the last week has showed another rise of US oil producers activity. The number of active rig counts rose by 8 w/w which obviously favours the further rebound of supply on the market.
There are 591 active rig counts in the US right now, the 500 level has been broken for good and it should constitute the solid pace of growth in case of supply. It has larger consequences for the whole market which may start balancing despite production cuts from OPEC. Rising US oil production may discourage OPEC members from keeping to the agreement.
Oil producers have increased production, tha numer of active rig counts have risen, source: Bloomberg, XTB
However the market still focuses on the OPEC deal and the EIA report published on Friday which stated that OPEC compliance reached a record 90% plus signals a growing global demand for oil. Kuwaiti Oil minister has spoken today. He’s said that current oil prices are good and expected to rise with higher compliance to the OPEC output reduction deal. He’s said that OPEC compliance is currently at 92%, non-OPEC 50%.
Oil remains within a relatively tight consolidation. The lower bound above 50$ has recently been respected and price has turned higher towards the upper bound of the consolidation below 55$. The medium-term trend remains bullish so a breakout cannot be excluded.
Oil remains within a thight consolidation, we could see an attack on the nearest resistance below $55.