WTI crude oil prices surged during the light trading day on Christmas holiday mainly due to Russia as they said cooperation with OPEC on supply cuts would continue. Besides, the certainty surrounding the United States and China will likely finalize a trade agreement also supported crude oil prices.

The OPEC and Russia will continue their cooperation as far as it will be considered effective and brings any results, Russian energy minister Alexander Novak said in an interview on Monday.

It is worth mentioning that the OPEC and allies agreed in November to continue and deepen inventory curbs in place since 2017, and around 2.1 million BPD will likely be taken off the market, or almost 2% of global demand.

On the other hand, the market is also flashing green because the United States President Donald Trump said on Tuesday that he and Chinese President Xi Jinping would sign the deal soon in a signing ceremony where ‘we will sign the greatest phase deal of Sino-US’. Trade uncertainties between the United States and China has kept pressure on the crude oil market in the wake of worries of recession in demand growth.

On the flip side, the deal signed between Saudia Arabia and Kuwait on Tuesday about the Neutral Zone between the 2-countries may add to supply next year. The purpose behind the agreement is to end a five-year conflict between the OPEC members and restart fields which will likely produce 0.5 million bpd, or 0.5% of global supply.

However, the crude stocks are expected to have dropped by nearly 1.8 million barrels last week, the second consecutive week of drops. Meanwhile, the weekly government report on inventories has been delayed by two days in the wake of Christmas. The report is normally released on Wednesday at 10:30 am EST (15:30 GMT).

Daily Support and Resistance
S3 59.58
S2 60.24
S1 60.67
Pivot Point 60.89
R1 61.32
R2 61.55
R3 62.2

WTI crude oil’s bullish channel continues to play as it’s keeping oil supported around 60.50 along with resistance around 61.10. A bullish breakout of this resistance can extend buying until 61.75.

The RSI and MACD hold in the buying zone, suggesting chances of a bullish bias in the crude oil.

WTI is likely to trade bullish above 60.89 and bearish below the same level. Whereas, the bearish breakout of 60.89 support can lead crude oil prices towards 59.95. Good luck!