Oil prices reacted sharply at the start of the week to news of drone attacks wiping out some of the oil production. However, the price of WTI crude oil has been steadily declining since Monday. Saudi Arabia announced that it expects oil production to return to normalcy by the end of this month. Meanwhile, the weekly crude oil inventories showed a modest buildup of 1.1 million barrels.
WTI Could Extend Declines Further
Crude oil prices could extend the decline further as price action tests the support area of 57.50. Following Monday’s surge, the gap is likely to be filled in the near term outlook. The lower support at 54.42 is therefore likely as oil prices look to fill the gap. To the upside, the gains are locked near the resistance level of 61.00.
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