WTI hits fresh two-and-a-half year highs above $61

Crude oil prices extended their rally with the barrel of West Texas Intermediate hitting its highest level since June 2015 at $61.40. As of writing, the barrel of WTI was trading near that recent high, adding a little over $1, or 1.7% on the day.

Although the North Sea Forties pipeline returned to full production and the supply disruptions from Libya ended, investors remained focus on the turmoil in Iran and the escalating tensions in the country continued to weigh on the sentiment. Commerzbank analyst Carsten Fritsch told Reuters, "it's surprising that prices remain at such elevated levels near two-and-a-half year highs despite the main cause of the recent rally disappearing," and further added "prices face a correction as support lent by unrest in Iran will weaken unless the situation begins to affect oil production, which is not yet the case, or the United States re-imposes sanctions."

With Russia increasing its output and the shale producers in the United States looking to take advantage of rising prices, the relentless rally of crude oil may lose momentum in the near term. Later in the session, the API is going to release its weekly oil stock report ahead of tomorrow's EIA report, which will also show the change in production levels in the U.S. 

Technical outlook

The barrel of WTI could face the first technical resistance at $62 (psychological level) ahead of $62.60 (May 6, 2015, high) and $63.40 (Dec. 10, 2014, high). On the flip side, supports are located at $60 (psychological level), $59.49 (Dec. 28, 2017, low) and $58.30 (Dec. 26, 2017, low).