Every Friday the North American rig count is released at noon central time (6pm BST). On the Baker Hughes website it says “The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons”. Traders can use the rig counts as a proxy for oil production and oil services demand, and can sometimes also use the counts to predict where the price of WTI crude oil is headed next.
That means: if the rig count comes in higher than expected, one could convey that demand for products used in drilling, completing, producing and processing hydrocarbons is about to rise, giving an indication that WTI might be about to push higher (at least in the short-term). Adding the current technical picture for WTI on an hourly time-frame, together with, the clear downward sequence that has occurred since the beginning of October, things are getting interesting.
Source: Economic Events 26 October 2018 – Admiral Markets’ Forex Calendar
The idea: if the rig count comes in higher than expected, it could result in a short-term push higher in WTI, nevertheless: the sequence of lower highs and lows is in play, as long as bulls can’t push WTI prices back above 70 USD. That being said, bears are probably hoping for a positive rig count, as it most likely pushes WTI back towards the pre-weekly lows around 68.50 USD/BBL, where from a technical standpoint, WTI faces a short-term short trigger from which another stint lower with a target of around 64/64.50 USD/BBL, the region around the August lows could be initiated as a result.
Source: Admiral Markets MT5 with MT5SE Add-on, Accessed: 25 October 2018, 11:00 PM CEST
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