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  • Crude oil prices gain traction as new NAFTA agreement boosts demand for commodities.
  • Latest Reuters survey shows falling Iranian imports weigh on oil production.
  • Brent rises above $84 for the first time since November 2014.

After closing the previous week on a strong note, crude oil prices extended their rally on Monday and the barrel of West Texas Intermediate came within a touching distance of $75 to refresh its highest level since early July. Meanwhile, the barrel of Brent broke above $84 for the first time in nearly four years.

With the U.S., Canada and Mexico finally reaching a new trade deal, the market sentiment improved on Monday to boost the demand for commodities and help crude oil preserve its bullish momentum.      “The NAFTA deal would boost oil prices because it increases the growth prospects not only for Canada and the U.S., but for North America as a whole,”  Phil Flynn, an analyst at Price Futures Group in Chicago, told Reuters.

Meanwhile, the latest Reuters survey showed that the OPEC’s production boost in September was limited by the declining Iranian oil imports ahead of the U.S. sanctions that are expected to into effect on November 4. Concerns over tightening Iranian oil supplies continue to support the rise in crude oil prices. In line with Reuters’ survey, Bloomberg also reported that the OPEC production was expected to rise by only 30,000 barrels per day in September as the majority of the increase was offset by a 140,000 bpd fall in Iran’s production.

Technical levels to consider

With a decisive break above $75 (psychological level), the barrel of WTI could target $76.20 (Nov. 20, 2014, high) and $77  (Nov. 24, 2014, high). On the downside, supports align at $73 (daily low), $71.85 (Sep. 28 low) and $70.30 (20-DMA).