Oil recovery supported by a broadly weaker USD

Following a choppy trading action, WTI crude oil turned higher and is now trading back in positive territory around $43.90 region, supported by broadly weaker US Dollar.

Earlier on Friday, oil ticked lower to $43.30, digest Thursday's 4% strong rally to three-week highs led by renewed hopes for a collective production freeze after comments Saudi’s energy minister Kahlid al-Falih comments on taking action to stabilize prices. 

Adding to this, Friday's dismal US economic data dashed hopes of an eventual Fed rate-hike decision in 2016, which weighed heavily on the US Dollar and extending support to dollar-denominated commodities, including oil.

Nevertheless, the black gold is now set to post second consecutive weekly of gains from a multi-month low level, below $40.00/barrel mark tested in the previous week. 

Next on tap will be the weekly US oil rig count report by Baker Hughes that has been showing a continuous rise in the number of oil rigs during the last six weeks and fueling concerns of a global supply glut.

Technical levels to watch

From current levels, $44.00 remains immediate hurdle, which if cleared should continue boosting the commodity towards an important support break-point, not turned strong resistance near $44.50 region. A follow through appreciating move would negate any near-term bearish bias and open room for continuation of the near-term recovery trend.

On the flip side, weakness below session low support near $43.30 could get extended towards $42.70-65 support area, which if broken seems to drag it back towards $41.50 strong support.