WTI targets $55 on the upside; Nine-month recovery continues - Baker Hughes

WTI crude oil finished the week on a positive note as the commodity clocked above the $54.00 mark and at the close ended around $53.80 or $1.60 above the weekly low. 

Moreover, the dollar-denominated commodity seems to consolidate a robust ground above the $50 mark as it totals 9-straight weeks building higher-highs and lower-lows amid a much-needed pause in the dollar rally. 

WTI retreats from $54.00 mark, but sticks to daily gains

$50 a barrel = US energy companies drilling up

Reuters reports, "According to energy service firm Baker Hughes, Drillers added 17 oil rigs in the week to Feb. 3, bringing the total count up to 583, the most since October 2015. Since crude prices first topped $50 a barrel in May after recovering from 13-year lows last February, drillers have added a total of 267 oil rigs in 32 of the past 36 weeks, the biggest recovery in rigs since a global oil glut crushed the market over two years starting in mid 2014."

Technical levels to watch

In terms of technical levels, upside barriers are aligned at 55.22 (high Jan.1), then at 62.55 (high May 3, 2015) and above that at 68.70 (200-SMA). While supports are aligned at 50.70 (low Jan.8), later at 46.10 (50-SMA) and below that at 39.20 (low July 2016). On the other hand, Stochastic Oscillator (5,3,3) seems to head north as prices trade above 100-DMA and 50-DMA, therefore, the odds favor a bullish breakout and as consequence higher Oil prices in the near term. 

Data Supports Cautiously Optimistic Fed View