WTI rises above $46 ahead of Baker Hughes rig count

Crude oil prices recovered on Friday after losing nearly 5% in the previous day. Fueled by the heightened expectations of an extension to supply cut deal, the barrel of West Texas Intermediate rose to $46.66 in the NA session and is now trading at $46.40, up 1.93%, or 88 cents, on the day.

Today's rebound was fueled by the recent comments from Saudi Arabia officials, which suggested that Russia was ready to join OPEC in extending output cuts to reduce a persistent supply glut. In a phone interview, Adeeb Al-Aama, Saudi Arabia's OPEC governor, told Reuters that Saudi Energy Minister Khalid Al-Falih has visited last week some of the non-OPEC producers and they all have expressed their commitment to the deal. He further added that there was a growing conviction that a six-month extension may be needed to rebalance the market, but the length of the extension was not firm yet.

• Saudi’s OPEC Governor: Growing conviction that 6-month OPEC cut deal extension may be needed
• Energy Ministry: Azerbaijan has fulfilled its obligations on oil output cut to OPEC - LiveSquawk

On the other hand, the US Dollar Index continued to suffer losses on Friday despite the strong NFP figures, allowing the WTI to extend its recovery move. As of writing, the DXY was near its 6-month low 98.50, losing 0.1% on the day. Now the markets turn their attention to the Baker Hughes rig count, which is scheduled to be released at the top of the hour. Even if the data shows an increase in the total number of active oil rigs in the U.S., the WTI could remain bid.

Technical outlook

The barrel of WTI could encounter the first resistance at $47 (psychological level) ahead of $47.75 (May 4 high) and $48.25 (May 3 high). On the flip side, supports align at $45 (psychological level), $44.25 (Nov. 10 low) and $43.75 (May 4 low).