WTI flirting with daily highs above $49.00

After yesterday’s sharp sell off, crude oil prices are attempting some tepid recovery for the time being, taking the barrel of the West Texas Intermediate back above the $49.00 mark.

WTI weaker after OPEC disappointed traders

Prices of the barrel of the American reference for the sweet light crude oil are looking to consolidate around current levels following yesterday’s deep pullback from 5-week tops in the $52.00 neighbourhood in the wake of the OPEC meeting.

WTI plummeted around 5% - the biggest daily drop since mid 2016 - after the crude oil cartel (plus 11 non-OPEC oil producers, including Russia) agreed to extend the current output cut deal to Q1 2018, disappointing traders who were expecting deeper cuts and for longer.

It is worth recalling that the rally in WTI has been also bolstered by a persistent drop in US crude oil supplies, as reported by the API and EIA, all despite the rising US drilling activity, which in turn keeps well and sound the up trend in US oil production.

Later in the session, driller Baker Hughes will report on the US oil rig count, while another revision of US Q1 GDP figures should keep the attention on the buck.

WTI levels to consider

At the moment the barrel of WTI is gaining 0.65% at $49.22 facing the next up barrier at $52.00 (high May 25) seconded by $52.65 (high Apr.18) and then $53.76 (high Apr. 12). On the downside, a breach of $48.27 (low May 26) would aim for $48.03 (low May 17) and finally $47.58 (38.2% Fibo of the April-May drop).