WTI clings to strong gains beyond $53.00 handle

WTI crude oil extended overnight gains and managed to move back above $53.00/barrel mark on Tuesday. 

Currently trading close to session peak, around $53.20-25 band, the black gold continues to benefit from positive comments from Saudi Arabia, OPEC's de facto leader, that oil market would rebalance by the end of the first half of 2017 and that it would adhere to its production cut pact between OPEC cartel and other major non-OPEC producers. 

Adding to this, a sharp slide in the US Dollar, led by a slump in the US treasury bond yields, provided an additional boost to the dollar-denominated commodities - like oil.

Investors will now be watching for signs of rise in US output as it could offset the effect of supply cut agreement between major oil producers. Hence, focus would be on the US crude stockpiles data from API on Wednesday and the official EIA report, scheduled for release on Thursday.

Technical levels to watch

Immediate upside resistance is seen at $53.50 (Jan. 12 high) above which the commodity seems to head towards $53.85 intermediate resistance, en-route $54.00 round figure mark. On the downside, renewed weakness below $53.00 handle could get extended towards $52.55 intermediate support ahead of $52.15 area (yesterday’s low).