It’s Friday and that means it’s time for the Baker-Hughes Rig Count. As of late, the numbers have been rising in lockstep with oil prices. This week shows yet another gain, with U.S. oil rigs in operation coming in at 324, up from 318. Subsequently, aggregate oil and natural gas rigs are also up by six, now standing at 417. For the moment, North American producers are taking a bullish stance toward the energy markets.
In a Live Market Update from Thursday, I covered the ongoing blockage of the Suez Canal. The situation hasn’t changed, with the massive freighter Ever Given still stuck in the mud. Subsequently, investment megabank JP Morgan advised its clients to buy oil and energy stocks. According to JP Morgan chief global strategist Marko Kolanovic, if the situation is not resolved soon, shipping prices and commodity prices will soar. This will artificially spur inflation and place significant pressure on many markets.
If you believe JP Morgan’s analysis, then it’s time to sell the USD/CAD. From a post-Baker-Hughes rig count technical standpoint, this is a risky proposition.
Rig Count Rises, USD/CAD Falls
As we roll into the weekend, the daily uptrend in the USD/CAD is valid. Rates are above downside support and hovering near the 1.2600 handle.
Overview: Since the Baker-Hughes rig count has been released, WTI crude oil futures have entered rotation above $61.00. Be on the lookout for any headlines from the Suez Canal over the weekend. If the Ever Given is suddenly back in operation, WTI will be poised to fall on next week’s open. Should the situation escalate, I’ll be looking for a short entry point in the USD/CAD.