WTI down to test $ 58 mark ahead of US rigs count data

• Upside capped by rising US output.
• Eyes on the US drilling activity report.

 WTI (oil futures on NYMEX) is seen extending its retreat from near one-week tops of $ 58.38, as the bulls remain on the sidelines ahead of the weekly US rigs count data due later on Friday.

WTI: Will it hold the upside?

The barrel of WTI drops for the first time in four trading sessions, reversing yesterday’s upmove to fresh multi-day tops. The move lower can be mainly driven by increased concerns over the expected re-opening of the Forties pipeline in the North Sea next month, which would pump in 450,000 bpd.

Moreover, rising US output levels combined with looming uncertainty over the efficacy of the OPEC output cuts extension continue to negate the weekly drawdown seen in the US stockpiles, in turn adding to the weight on the commodity.

Also, a profit-taking slide in the black gold cannot be ruled, as markets adjust positions ahead of the year-end holidays. Attention now turns towards the US rigs count data due to be published by oilfields services company, Bakers & Hughes.

At the time of writing, WTI trades -0.46% lower at $ 58.09 while Brent drops -0.22% t0 $ 64.75.

WTI Technical Levels

The resistances are aligned at $58.50 (psychological levels) ahead of $59 (Nov 24 high) and $59.85 (April 2015 tops). On the downside, supports are located at $57 (zero figure), $56.39 (50-DMA) and $55.82 (Dec 7 low).”