Oil prices reversed the declines over the past few days and managed to close on a bullish note on Friday. WTI Crude oil prices settled at $56.74 a barrel by Friday’s close reversing the declines from the previous days during the week.

The reversal in the oil price came about despite mixed macroeconomic developments.

On Friday, the oil and gas rigs data showed that the number of rigs rose by 8. This was according to the Baker Hughes rig count data. Previously the number of oil rigs were steadily declining.

Earlier last week, the WTI and Brent crude oil both posted declines on a surprising increase in crude oil inventories, data from the API and the EIA showed.

It was the biggest catalyst which came amid news that the world’s largest oil fund from Norway was looking to lower its exposure to the oil and gas industry.

Technical Analysis on Oil

While Crude oil prices briefly fell, traders bid up the commodity by Friday’s close. Oil prices have been trading near the resistance level of 57.87 – 57.60. Price briefly touched this level before declining.

The attempt to retest this level could come once again, but the technical indicators show a bearish divergence building up. The support level near 52.25 – 51.82 remains an open target as crude oil prices could be seen posting a correction to this level in the near term.

Further gains in crude oil prices are expected only on a strong breakout above the resistance level.