Oil prices put in the second weekly gain in a row but remain in a downward trending linear regression trading channel.

The weekly gains were mostly a result of a strong upside move in Friday’s trading session with Brent hitting the highest level in around two weeks with both the spot WTI and Brent contracts gaining around 1.9 percent for the session. Part of the support came from a scheduled appearance by the Saudi Crown Price on 60 minutes on Sunday night with topics likely to touch on Saudi’s view of Iran, Syria, the broader Middle East and others.

The fundamental snapshots last week were mixed with OPEC and the IEA releasing their monthly oil forecasts with the conclusions slightly divergent. The OPEC report was biased to the bearish side (as was the EIA report issued the previous week) while the IEA report was slightly bullish. The weekly US oil inventory snapshot was supportive as total combined stocks of crude oil and refined products declined on the week.

Overall the fundamentals were neutral on the week. The externals were also mixed with the only constant… an above average level of volatility with elevated uncertainty. The US dollar was slightly higher for the week with most global equity markets lower on the week. Both were negative price directional drivers for the oil complex. The rolling 10-day average correlations for the US dollar Index and the S&P 500 Index versus the spot WTI contract moved into the non-correlated area for both externals.

Friday’s divergence between oil and WTI had a strong impact on the 10-day moving average correlation. Heading into the new trading week and strictly basis the 10-day correlation average suggest that the externals may play a lesser role in price setting… at least for the first half of the new trading week.

A negative data point hit the media airwaves late Friday afternoon in the latest Baker Hughes data reporting the number of rigs deployed to the US oil sector increased on the week (by 4 rigs) after decreasing during the previous week.

The latest rig data does still support the overall uptrend in the US oil rig count remains. Total rigs deployed to the oil sector are higher by 169 or 26.8 percent year over year. Oil rigs increased with US crude oil production increased last week. US crude oil production continues in an uptrend setting new record highs on a weekly basis. Total US crude oil production is about 14 percent above where it was for the same week a year ago. This week’s production came in at 10.381 million bpd.