WTI crude oil prices ticked higher on Monday but struggled to gain further traction beyond $54.00/barrel mark.
Despite of broad based US Dollar recovery, which tends to dent demand for dollar-denomiated commodities – like oil, the commodity moved higher on Monday amid growing concerns over supply disruption in wake of news that the US could impose new restrictions on Iran for testing a ballistic missile.
Adding to this, market also cheered the news that the US government was poised to scrap a rule that calls for transparency on payments by energy and metals firms to foreign governments.
Further upside, however, remained capped amid steady improvement in the US oil drilling activity, with the latest Baker Hughes report showing the number of rigs drilling for oil in the US increased by 17 last week, marking 13th weekly gain in the previous 14.
The data continued fueling worries that the ongoing rebound in the US shale production might derail efforts by other major oil producers to bring back balance in global oil markets.
Technical levels to watch
Currently trading around $53.90 region, sustained momentum above $54.00 mark is likely to lift the commodity towards $54.35 resistance (yesterday’s high), which if cleared has the potential to continue boosting it towards $55.00 psychological mark ahead of Jan. monthly highs resistance near $55.25 level.
Meanwhile on the downside, immediate support is pegged near $53.55-50 region below which the commodity is likely to head back towards $53.00 handle, en-route $52.65-60 support area.
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