Crude oil inched higher on Monday during the Asian session, increasing the price to more than 48.50 amid some key economic news. The technical bias remains bullish because of a Higher High in the recent upside rally.
As of this writing, the West Intermediate Texas (WTI) is being traded near 48.85. A support may be noted around 48.20, a key horizontal support area ahead of 46.38, the swing low of the last major downside move as demonstrated in the following daily chart.
On the upside, the black gold is expected to face a hurdle near 50.00, the confluence of a psychological number as well as the horizontal resistance ahead of 52.09, the swing high of the last major upside rally. The technical bias will remain bullish as long as the 46.38 support area is intact.
US Oil-Rig Count
The number of rigs drilling for oil in the U.S. rose by nine over the past week to 337, marking the third straight week of gains, according to the oil-field services company Baker Hughes Inc. The U.S. oil-rig count, viewed as a proxy for activity in the sector, has fallen sharply since the oil prices began to drop in 2014. The number of the U.S. oil rigs peaked at 1,609 in October 2014. The nation’s gas-rig count rose by one in the past week to 86. The U.S. offshore-rig count was 21, unchanged from last week but down by six from a year ago.
Considering the overall technical and fundamental outlook, buying crude oil on dips appears to be a good strategy in short to medium term.