WTI pulls away from 10-week highs, settles near $42

• WTI is rising for third straight day on Wednesday.
• OPEC sees global oil demand by rising 6.25 million barrels per day in 2021.
• Algeria's energy minister says OPEC+ could extend production cuts into 2021.

Crude oil prices rose sharply on Monday and Tuesday supported as coronavirus vaccine optimism revived hopes for a steady rebound in the global energy demand.

After gaining more than 10% in the first two days of the week, the barrel of West Texas Intermediate (WTI) extended its rally and touched its highest level since early September at $43.04. However, the WTI erased the majority of its daily gains during the American trading hours and was last seen trading at $41.95, where it was up 0.35% on the day.

OPEC's demand outlook weighs on oil prices

Earlier in the day, Algerian Energy Minister Mohamed Arkab said that OPEC+ could extend oil production cuts into 2021 or deepen them is required by market conditions. Although these comments helped crude oil prices continued to push higher, OPEC's monthly report painted a dismal picture of the market.

OPEC said it lowered its forecast for global oil demand growth to 6.25 million barrels per day (bpd) for 2021 from 7 million bpd in July's report. "The oil demand recovery will be severely hampered and sluggishness in transportation and industrial fuel demand is now assumed to last until mid-2021," OPEC further noted in its publication, as reported by Reuters.

Additionally, the report revealed that OPEC's oil output in October increased by 320,000 bpd driven by a recovery in Libya's production.

Technical levels to watch for