Drilling rigs fell by 40 last week.
The final data point of the week is the Baker Hughes US rig count, due at 1 pm ET (1700 GMT). There are no consensus estimates but drilling is expected to continue to diminish after rigs fell to 988 from 1028 last week. The average decline over the past 4 weeks is 35 rigs but there is some believe in diminishing returns so market expectations are probably around -28.
Baker Hughes rig count
Crude prices are down 64-cents to $56.02 today after a two day breakout that rose as high as $57.50 yesterday -- the highest level of 2015. The Asian low of $55.75 is support after it was successfully retested a few hours ago. Yesterday, dips close to $55.00 found repeating buying interest.
The Baker Hughes numbers are broken down by oil and natural gas rigs. Last week, oil rigs fell by 42 and natty rigs rose by 2. Overall oil rigs are down to 760.
Traders are also looking for information on production. There is a large lag between when a well is drilled and when it stops producing oil. In shale, it's around 6 months and oil analysts estimate US production will peak within a month and then begin to moderate. In the most recent data, the US was producing 9.4 million barrels per day.
The psychology of a peak in US production is behind the turnaround in oil prices but other producers continue to ramp up production and the market remains oversupplied so it could be fleeting. Still, that doesn't rule out a rise above $60 before renewed selling begins.