Crude oil prices gained traction in the second part of yesterday’s session on the back of the weekly United States Crude oil stock report published by the Energy Information Administration, and surged towards the $56 handle. Earlier in the week, Reuters reported that the OPEC and its allies were planning to discuss deeper oil output cuts to counter the dismal oil demand growth outlook at their next meeting in December and allowed the WTI to close the day with a gain of more than 1%. The EIA said commercial crude oil inventories in the US decreased by 1.7 million barrels for the week ending October 18 compared to analysts' estimate for a build of 2.2 million barrels.
After consolidating in the same range since last week, Crude oil prices surged during yesterday’s session and broke above the $55 handle all the way to print a high of $56.04 per barrel. The price is currently trading just below the $55.92 resistance level with the momentum being extremely bullish. We will keep focusing on the upside if the price succeeds to maintain its momentum and we will be watching the $56.27 resistance level closely, however, traders should be careful from overbought conditions.
Support: 55.06/ 54.42
Resistance: 55.92/ 56.27