The Baker Hughes weekly rig count shows fewer active rigs this week, dropping by 8 to a total of 539. Specifically, oil rigs fell by 7 to 425, while natural gas rigs decreased by 1 to 108. Crude oil prices went down by $0.52 or 0.77%, now trading at $66.94. However, over the week, prices increased by 2.95%. Compared to last year, prices have dropped by 6.78%. Today, the lowest price for crude oil was $67.54. Even though prices have decreased, they are still above the midpoint of April’s low at $66.33. The 200-hour moving average is slightly lower at $66.30. We are observing a steady decline in drilling activity, with the rig count now below 540 total rigs. This is a significant drop from past peaks. The biggest decrease was in oil rigs, which lost seven units, while gas rigs fell slightly as well. Such reductions often lead to less output in the future, affecting price trends. Oil prices have decreased modestly today, down just over half a dollar. Yet, they have gained nearly 3% over the past week. So, while today’s movement appears negative, it doesn’t indicate a larger weakness. Instead, it may reflect short-term adjustments based on technical factors, or simply buyers taking a break. Prices hovered near today’s low of $67.54, comfortably above the recovery midpoint from April’s low of $66.33, indicating a current upward trend. The 200-hour moving average is just below this at $66.30, and it has not been tested yet. It could be important for short-term direction. From a trading perspective, it’s crucial to monitor these two levels. If prices dip below either, we may see quicker movements downward. We shouldn’t expect a smooth break through these thresholds. The weekly price gain contrasts with the overall downward trend this year. This week’s bounce might just be a brief correction. For those following price movements, upcoming sessions will be sensitive to news on inventories, economic data, and signals from energy producers. With softer drilling activity and prices above key technical supports, the focus may shift to whether prices can establish a short-term floor or will test lower moving averages. If current levels hold into early next week, we may see further upward movement. However, if prices fall below $66.30, this week’s progress could reverse. Traders should adjust their strategies based on the overall evidence, not just a single movement. With rig counts declining and prices in a middle range, the situation could shift either way. Corrections can happen quickly when liquidity decreases. Stay alert, keep your charts visible, and watch for signals. Quiet Friday closes might not remain that way.

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