WTI swings back above $ 54, OPEC & non-OPEC cuts eyed

Oil futures on NYMEX had a positive start to 2017 so far, as the sentiment remains underpinned by hopes of an OPEC output cut deal finally materializing this month.

Oil starts 2017 on firmer footing

Currently WTI rallies +0.80% to fresh daily top of $ 54.15, quickly bouncing-off a brief dip below 54 marker. Oil prices caught fresh bid-wave and made a comeback as the first European session kicked-in for oil markets, with the investors creating fresh long positions amid reports that the non-OPEC producers are preparing to cut output in accord with last month’s OPEC production cut deal in a bid to pep up prices.

However, the black gold struggles to extend the upside as the greenback regains momentum and advances further versus its main peers. A stronger US dollar makes USD-denominated oil more expensive for the foreign buyers.

Focus also remains on the US supply side scenario, as we head into 2017, with the API and EIA weekly crude stockpiles report up for grab in the week ahead.

WTI technical levels

A break above $ 54.37 (Dec 28 high) could yield a test of Dec 12 high of 54.57. While a breach of support at $53.41 (Dec 30 low) would expose the Dec 23 low of $52.26.