WTI deflates to the $51.20 area, API eyed

Crude oil prices are trading on a softer fashion on Tuesday, sending the barrel of West Texas Intermediate to the $51.20 region for the time being.

WTI focus on OPEC, API

Prices for the WTI are deflating from the area of recent fresh 2016 highs above the $52.00 mark in response to the deal at the OPEC meeting on November 30. Recall that OPEC members have agreed to cut the oil production by 1.2 mbpd to 32.5 mbpd starting in January 2017.

Prices for the barrel of the American benchmark for the light sweet crude oil have gained nearly 17% since last week’s lows in sub-$45.00 levels to the area around $52.40 traded on Monday, prompting sellers to step in and cash up part of those string gains.

In the meantime, the focus of attention will now shift to the meeting between OPEC and non-OPEC members to be held in Vienna on December 10.

Later in the session, the weekly report on US stockpiles by the API is only due, ahead of the DoE report due tomorrow and the report on US drilling activity by Baker Hughes on Friday.

Furthermore, crude oil speculative net longs have climbed to 4-week tops during the week ended on November 29.

WTI levels to consider

At the moment the barrel of WTI is retreating 1.21% at $51.23 facing the next support at $50.93 (low Dec.5) followed by $47.99 (55-day sma) and finally $44.82 (low Nov.29). On the flip side, a breakout of $52.42 (2016 high Dec.5) would aim for $53.89 (low Jul.10 2015) and then 62.58 (high May 6 2015).