Crude oil prices continued to rally higher yesterday. WTI crude bottomed at $56.48 then skyrocketed over $2 to tap $58.55, the highest level that the commodity has reached since September 24. By the end of yesterday’s trading, it was at $58.21.
It would seem that the surge in crude oil price still stems from the reports released earlier this week. The biggest news was that Russian President Vladimir Putin clarified that the country will stand aside OPEC members cutting oil production back as they meet on December. Initially, crude oil prices dropped at the start of the week on speculations that Russia will not reduce its oil production. This was fueled by the fact that the country has cut back to 11.23 million barrels per day from 11.25, which is less than what its deal with OPEC called for.
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Crude Oil Price Outlook
The rise in crude oil prices could be challenged by risk aversion which has been increasingly overwhelming financial markets.
WTI crude is almost at the top of the ascending channel I pointed out yesterday as it cleared resistance at $58.00 psychological handle. The next near-term resistance is around $59.13 where the top of the channel is and where the commodity also found resistance mid-September.
On the other hand, if there are enough sellers in today’s trading and we see a strong bearish close below $58.00. Crude oil prices could tumble to support at $56.25 where the bottom range of the channel is and where the commodity made lows earlier this week.
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