WTI extends rally into sixth straight day, trades at yearly highs near $57

• Crude oil prices continue to push higher on Friday.
• Falling crude oil stocks and upbeat demand outlook boost WTI.
• Investors are waiting for January Nonfarm Payrolls data from US.

Crude oil prices posted daily gains for the fifth straight day on Thursday and continue to edge higher on Friday. As of writing, the barrel of West Texas Intermediate (WTI), which touched its highest level in more than a year at $57.07 earlier in the day, was up 0.45% at $56.70.

Improved energy demand outlook lifts WTI

The upbeat macroeconomic data releases from the euro area and the US this week and ongoing vaccinations revived hopes for a strong recovery in energy demand and provided a boost to crude oil. Furthermore, heightened optimism for more fiscal stimulus in the US provided an additional boost to WTI.

Meanwhile, the weekly report published by the US Energy Information Administration (EIA) showed that crude inventories in the US declined to its lowest level since March 2020 with a draw of more than 10 million barrels in the last two weeks.

Later in the session, Nonfarm Payrolls (NFP) data from the US will be watched closely by the market participants. A stronger reading than the market expectation of 50,000 could help WTI gather further bullish momentum and build on its weekly gains.

Technical levels to watch for