Andy’s Notes: Rig counts aside, it would appear that once again, we have a momentum casino going – this time in the oil markets. Shorts, who piled in over the fast few months are getting hammered and are being forced to cover at higher and higher prices. While many find this amusing, it goes to show (once again) that the ‘markets’ of today are no place for the average investor, particularly the futures markets and foreign exchange markets. A lifetime of work can literally be lost in a few ticks and I’m not even kidding a little about this. So to all you Ralph Kramdens of modern finance, who have some get rich quick scheme plotted, remember it can just as easily turn into a get broke even quicker scheme. Add borrowed money (leverage) to the situation and you’re decorating your very own financial casket. Buyer beware.

Ahead of today’s rig count data, WTI (and Brent) Crude is extending its short-squeeze gains after the bullish inventory data trend was confirmed (shrugging off the surge in production). Signals from an increaisng number of firms that they are cutting capex (and this drilling) has helped send WTI and Brent back above their 200-day moving-averages.

Halliburton, promising to be disciplined in adding more fracking gear to the oilfields, says U.S. explorers are “tapping the brakes” on drilling as the price of oil struggles to breach $50 a barrel.

Brent’s front-month has pushed into backwardation and the medium-term WTI curve the same…suggesting producers are actively hedging next year’s supply at these new high prices…

The recent strength has pushed WTI back above its 200-day moving-average…

Support or Resistance? We suspect the 1pmET rig count data will decide the rest of the day.