WTI extends recovery above $69, gains over 2% on the day

  • Russia's Novak suggests an extended supply cut deal.
  • EIA revises down U.S. crude oil output expectations.
  • Weekly API report will be released later in the session.

Crude oil prices gained traction on Tuesday and finally staged a decisive recovery with the barrel of West Texas Intermediate breaking above the $69 mark. At the moment, the barrel of WTI is trading at $69.30, adding 2.65% on the day.

Earlier today, according to the Russian news agency, TASS, Russia’s Energy Minister Alexander Novak said that the OPEC and its allies could sign a new long-term cooperation deal when they meet in early December and added that output quotes could remain in place after 2018. Furthermore, Iranian oil exports continued to decline before the U.S. sanctions go into effect in November to provide an additional boost to oil.

On the other hand, in its latest report, the U.S. Energy Information Administration announced that it forecasted the U.S. crude oil production to rise by 840 barrels per day to 11.5 million bpd in 2019 compared to the previous estimate of a daily increase of 1.02 million barrels.

Later in the day, the API is going to publish its weekly crude oil stock report, which showed a draw of 1.2 million barrels in the previous week.

Technical levels to consider

The next critical resistance for the WTI aligns at $70 (psychological level) ahead of $70.50 (Aug. 30 high) and $71.35 (Sep. 4 high). On the downside, supports could be seen at $68.90 (50-DMA), $68 (psychological level/20-DMA) and $66.85 (Sep. 7 low).

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