FxWirePro: WTI likely to meet sellers around $56-57 per barrel area

After steadily declining for seven consecutive weeks, the oil price is showing some signs of recovery since last week. After reaching as low as $49.4 per barrel, WTI halted its decline and currently trading at $53.9 per barrel. The global benchmark Brent is trading at $9 per barrel premium to WTI.

One of the key factors that helped to halt the decline has been the possibility of OPEC members, along with Russia, agreeing to new production cuts at the coming OPEC meeting in Vienna. Since Russia has shown resistance to production cuts and Qatar announced that it is exiting the OPEC after 57 years, it is not clear at this point that how much the cartel can really achieve, especially when Saudi production reached a record high of 11 million barrels per day, replacing declining production in Iran and Venezuela.

Meantime, or calculations suggest that WTI is set to run into heavy selling pressure going ahead. Selling is likely to begin around $55 per barrel, which would further intensify as the price moves higher to the $57 per barrel region.