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WTI erases majority of daily gains, drops below $57 ahead of Baker Hughes rig count

  • Oil sustains recovery momentum for the second day in a row on Friday.
  • Data from China showed crude oil imports rose to 9.01 million barrels per day.  
  • Baker Hughes rig count to give fresh clues regarding production levels in the U.S.

Crude oil prices gained traction on Friday with the barrel of West Texas Intermediate advancing to a three-day high of $57.77 before losing its momentum in the NA session. As of writing, the barrel of WTI was trading at $56.98, still gaining 0.5% on the day.

Earlier today, the trade data from China revealed that crude oil imports increased to 9.01 million barrels per day in November, pointing to a rising demand and boosting prices. Moreover, concerns over the possibility of a strike in Nigeria supported today's upsurge. "Generally speaking, the market is looking more healthy than sick. Threats of a strike later this month from a union in Nigeria, Africa's largest oil exporter, was supportive, as was reduced flow along the Britain's Forties oil pipeline, one of the grades that sets Brent prices," Tamas Varga, an analyst with PVM Oil Associates, told Reuters.

Nonetheless, investors seem to be taking some profit off the table ahead of the weekly Baker Hughes oil rig count data from the United States. Last week, the total number of active oil rigs increased to şits highest level since September at 749 as American producers are looking to take advantage of rising prices. Another increase in rig count today could weigh on oil before markets wrap up the week.

Technical levels to watch

The barrel of WTI could encounter the initial resistance at $57.75 (daily high) ahead of $58.35 (Dec. 4 high) and $59.05 (Nov. 24 high). On the flip side, supports could be seen at $55.80 (Dec. 7 low), $55 (psychological level) and $54.40 (Nov. 3 low).

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