Oil off session low, mildly weak at $41.70 ahead of NFP release

After Thursday's move to $42.00 mark for the first time since last Friday, WTI crude oil paused a two-day short-covering led rally and dipped to $41.45 region before erasing majority of its daily losses to currently trade with only marginal loss around $41.70 region.

Amid pre-NFP cautious trading action, recovery from 4-month lows seems to have stalled as traders remained reluctant to carry big bets as a surprisingly strong reading would revive hopes of an imminent Fed rate-hike action by the end of this year, which would eventually drive the greenback higher and weigh on dollar-denominated commodities - like oil. 

Moreover, markets will also keep a close watch on the latest US oil rig counts report from Baker Hughes, which last week showed fifth straight week of rise in US rig counts, for fresh insight over the supply-demand scenario in oil markets. 

Technical levels to watch

On the upside, $42.00 handle remains immediate barrier, which if conquered should continue boosting the black gold towards $42.60-70 intermediate resistance ahead of a strong horizontal resistance near $43.20 region.

Conversely, weakness back below $41.50-40 immediate support should drag it back to $41.00 round figure mark support, below which the commodity could extend its drop further towards $40.35-30 support.