WTI crude oil prices are still on the recovery rally mainly due to the hopes for deeper inventories cuts by the Organization of the Petroleum Exporting Counties and allies later this week and after industry data showed that crude inventories unexpectedly dropped.

OPEC and its allies, including Russia – a group is known as OPEC+ – should increase production cuts this week, when they meet in Vienna, according to Iraq, the group’s second-biggest producer (and also the member which has the worst record of compliance with the existing deal).
There is still some uncertainty in the market regarding whether OPEC will cut output further, although it is accepted that the group is interested in supporting prices.

The OPEC members meet on Thursday and then on Friday the OPEC+ group meets. WTI crude oil prices got an additional boost after industry group American Petroleum Institute reported late Tuesday that crude oil inventories in the US dropped unexpectedly last week. Inventories declined by 3.7 million barrels, more than double the expectations for a decline of 1.7 million barrels.

Markets were also watching out for updates on trade progress after a report that the US and China were moving closer to signing a ‘phase-one’ trade deal, a day after comments from President Donald Trump and Commerce Secretary Wilbur Ross dampened hopes of a possible near-term agreement.

As we are all well aware, President Donald Trump said on Tuesday an agreement to end the trade dispute will likely be delayed until after the American presidential election in November 2020.

Daily Support and Resistance
S3 53.28
S2 54.7
S1 55.48
Pivot Point 56.12
R1 56.9
R2 57.54
R3 58.96

WTI crude oil prices are consolidating around 58.65 resistance area. Crude oil has entered the overbought zone as we can in the Stochastic and bearish retracement seems imminent. On the lower side, the immediate support is likely to be found around 58. Where, the bearish breakout of 58 can trigger further selling until 57.55 area.

In case bulls decide to keep trading higher, we may see WTI testing 58.95 and 59.45 areas. Good luck!