WTI settles above $50, records highest weekly close since May

Crude oil prices are preserving their recent gains on Friday with the barrel of West Texas Intermediate looking to close the week above the critical $50 mark for the first time since mid-May. As of writing, the barrel of WTI was trading at $50.66, up around 25 cents on the week.

Oil prices continue to be supported by the heightened expectations of an extension to the supply-cut agreement. Following the meeting between the Organization of the Petroleum Exporting Countries and major producers in Vienna, “I believe that January is the earliest date when we can actually, credibly speak about the state of the market,” Russian Energy Minister Alexander Novak told reporters. Furthermore, Kuwaiti Oil Minister Essam al-Marzouq argued that the market was well on its way toward rebalancing.

• Russian Oil Min Novak: too early to discuss oil output deal extension

On the other hand, the decreasing oil output in the U.S. also played a part in this weeks price action. According to the latest data released by the General Electric Co's GE.N Baker Hughes energy services, drillers in the U.S. reduced five oil rigs in the week to September 22, bringing the total number down to its lowest level since June at 744. "The rig count, an early indicator of future output, is still higher than the 418 active oil rigs a year ago as energy companies had mapped out ambitious spending programs for 2017 when they expected U.S. crude to be higher than the $50 per barrel range where they are currently trading," Reuters reported.

Technical levels to consider:

The barrel of WTI could face the immediate resistance at $51.10 (weekly high) ahead of $52 (May 25 high/psychological level) and $52.85 (Apr. 14 high). On the downside, supports align at $50 (psychological level), $49.30 (Sep. 19 low) and $4810 (Sep. 13 low).