What was supposed to be the best week for US Crude oil since July 2013, today it finished Friday down 5% at $48.44 for May delivery. The good news is oil still finished up 5% for the week, but erased the 10+% gains it had reached as of yesterday.
The reason for today's quick decline? The number of rigs drilling in the United States dropped by a less than expected 12 rigs, bringing the total to 813 for the week. Still, it's the 16th week in a row that rig counts have dropped, but analysts have been looking for a bigger drop...to show that lower prices are putting the breaks on US supply of oil.
The other risk out there is geopolitical, specifically in the Middle East. Part of the rise earlier in the week was driven by supply risk in the Yemen conflict. Now that Arab countries like Saudi Arabia seem committed to stepping in and defeating the Houthi militia, including kidding their leaders earlier this afternoon, it has eased the fears of traders of a disruption.