WTI little changed near $ 57.50, OPEC outcome eyed

• WTI on the defensive ahead of the key OPEC outcome.
• 9-month extension to the OPEC output cuts priced –in?

WTI (oil futures on NYMEX) failed to sustain at higher levels and fell back below the $ 57.50 barrier, as markets digest the latest remarks from the OPEC officials ahead of the final outcome due later on Thursday.

WTI: Sell the fact?

The black gold remains on the defensive and lacks momentum to extend the bounce from $ 56.80 levels, as a sense of caution prevails amid dozens of headlines hitting the wires from the OPEC members, as the meeting in Vienna gets underway.

Saudi Arabian Energy Minister Al-Falih noted that he expects all the OPEC and non-OPEC members to implement the output cut extensions, which he believes will be for further nine months.

Despite, persisting optimism over the output cuts extension beyond March 2018, oil prices could witness a sharp downward rally, in response to the ‘Sell the fact’ trading, as a nine-month extension is already priced-in by the market participants.

Moreover, the sentiment remains fragile amid rising US oil output levels, after the EIA report showed that the US oil production hit a new record of 9.68 million barrels per day (bpd) last week. Rising US output levels offset a big than expected drop seen in the crude stockpiles last week.

At the time of writing, WTI trades modestly flat at $ 57.36, while Brent steadies near $ 62.65.

WTI Technical Levels

Higher-side levels: $ 59.03 (2-year highs), $ 60 (psychological levels), $ 61.82 (June-mid 2015 high)

Lower-side levels: $ 57.08 (20-DMA), $ 56.32 (Nov 21 low), $ 56.00 (zero figure)