Oil: WTI jumps more than 3%, erases weekly losses

Crude oil prices rose sharply on Friday. The West Texas Intermediate gained more than 3% as it climbed from under $47.00 to $48.65. The spike higher came after data showed US rig count dropped by 5 to 763. 

Crude oil erases weekly losses

WTI ended at $48.60, marginally below the level it had a week ago. It erased weekly losses with the rally on Friday. On Thursday it bottomed at $46.48, the lowest in three weeks. 

Turmoil in Venezuela, a relatively weak US dollar, and the Baker Hughes report pushed crude oil prices sharply to the upside on Friday. It had the best day since July 27. 

The short-term momentum changed dramatically with the recent rally and now the bearish outlook that was prevailing at the beginning of the week has been eroded. 

From a technical perspective, price is bouncing from the 55-day moving average. The rally stopped below a strong resistance area located in the $48.70 zone (horizontal resistance / 20-day moving average): a break higher would add strength for a continuation to the upside.