Baker Hughes reported that the oil and gas rig count increased by 1 to 255

Recap: After opening slightly lower on the day, oil prices reversed to the upside, supported by bullish signals out of this week’s OPEC meeting. However, gains were capped after Libyan commander said a blockade on the country’s oil exports would be lifted in a month. Oil markets have been bolstered by comments out of the OPEC meeting calling for better compliance to output cuts and by strong rhetoric from Saudi Arabia’s energy minister suggesting that those countries in non-compliance should be disciplined by  compensating those countries in compliance. October WTI settled at $41.11 a barrel, up 14 cents, or 0.3%, while November Brent lost 15 cents, or 0.4%, to settle at $43.15 a barrel. For the week, WTI was up 10.1%, which marked the largest weekly gain for a front month contract since the week ending June 5. Brent added 8.3%, the strongest weekly rise since the week of June 19. October RBOB finished up 1% at $1.2366 a gallon, while October heating oil ended down nearly 0.1% at $1.159 a gallon. RBOB ended the week up 12.9%, but heating oil was up a modest 6.4%.

Technical Analysis: Despite this week’s higher move in WTI, the main trend is still down, however near term momentum as shifted to the upside. We would look for a bit of range trading between $44.00 and $40.00. Near term support is seen at $39.88, the 10-day moving average. A break below $36.35 will signal a resumption of the downtrend. A trade above $44.19 will change the main trend of this market to up. Above this level, resistance is set at $45.

Fundamental News: Genscape reported that crude oil stocks at Cushing, Oklahoma fell by 646,578 barrels in the week ending September 15th.  Lower flows of crude from Canada to Cushing have helped ease an oversupply of oil at the delivery point over the past two weeks. U.S. imports of Canadian crude fell to 3.057 million bpd in the week ending September 11th from 3.226 million bpd in the previous week.

Baker Hughes reported that the oil and gas rig count increased by 1 to 255 in the week ending September 18th. The number of rigs searching for oil however fell by 1 to 179, the lowest level since the week ending August 14th, while the number of rigs searching for natural gas increased by 2 to 73, the highest level since July 10th.

The U.S. Bureau of Safety and Environmental Enforcement said energy firms reopened more offshore crude oil production by Friday in the U.S. regulated northern Gulf of Mexico as shut in output fell to 21% or 396,554 bpd.  It also reported that the amount of natural gas output from the Gulf also fell to 16% or 435 million cubic feet/day.

Eastern Libyan commander, Khalifa Haftar, said that his forces would let oil production resume for one month following an eight-month blockade of export facilities. A senior politician in Tripoli said a committee would be formed to ensure fair distribution of revenues. The blockade by eastern forces has cost Libya $9 billion in lost revenue so far this year.  Earlier, the chairman of Libya's National Oil Corporation, Mustafa Sanallah, said that lifting the force majeure restrictions that have halted oil exports from the country depends on demilitarizing all oil facilities. The force majeure, in place since the start of the year, was briefly lifted in July before it was imposed once again.  The chairman’s comments come after Turkey and Russia, the main power brokers in Libya's war, appeared to move closer in meetings in Ankara this week to an agreement on a ceasefire and political bargaining process.  The NOC chairman expressed regret over what he called the "politicizing of the oil sector" and use of it as a "bargaining chip" to achieve political gains. Libya's oil output has been almost entirely halted this year by a blockade on exports since January by the LNA.

Early Market Call - as of 8:30 AM EDT

WTI - Oct $40.06 down $1.06 per barrel

RBOB - Oct $1.1874 down 4.92 cents

HO - Oct $1.1283 down 3.07 cents