WTI rises above $57 in post-settlement trade

Crude oil prices started the week on a positive note and extended its recovery rally before reversing direction in the second half of the day. After advancing to a daily high of $57.55, the barrel of West Texas Intermediate dropped below $56 but was able to settle 30 cents higher at $56.76. Moreover, the WTI continued to rise in the post-settlement trade and was last seen up 1.15% on the day at $57.40.

Following a 12-day losing streak, crude oil gained traction last week as various OPEC officials said that OPEC+ was planning to introduce an additional output cut of 1- 1.4 million barrels per day to help the oil market find balance. However, Bloomberg reported that Russia wanted to watch the markets before agreeing to more supply reductions in the last OPEC meeting of the year in Vienna in December.

Additionally, the International Energy Agency's chief Fatih Birol warned over the potential negative effects of supply cuts. "Currently markets are very well supplied but we should not forget that spare capacity in Saudi Arabia is very thin, therefore cutting the production significantly today by key oil producers may have some negative implications for the markets and further tightening the markets," Birol argued.

Later this week, investors will be paying a close attention to the weekly stocks reports of the API and the EIA. Meanwhile, the EUA reported that the total shale regions' oil production in December was forecasted to increase by 112,000 bpd to 7.943 mln bpd (vs 105,000 bpd rise in November).

Technical levels to consider

The initial resistance for WTI aligns at $58 (Nov. 16 high) ahead of $59.30 (Nov. 13 high) and $60 (psychological level). On the downside, supports are located at $55.90 (Nov. 16 low), $54.75 (Nov. 13 low) and $54 (psychological level).