WTI trades modestly higher, stays below $53

• Crude oil prices are rising modestly supported by risk flows.
• Reuters survey showed that OPEC output rose in January. 

Crude oil prices continue to fluctuate in a relatively tight range on Monday after closing the previous week little changed. As of writing, the barrel of West Texas Intermediate was up 0.9% on a daily basis at $52.65.

Last week, the data published by the US Energy Information Administration showed a sharp decline in the US crude oil inventories and helped the WTI stay in the upper half of its weekly range. Additionally, easing vaccine-related tensions between the EU and the UK revived hopes for a steady recovery in energy and demand allowed oil to start the new week on a firm footing.

Meanwhile, a Reuters survey showed that the Organization of the Petroleum Exporting Countries’ (OPEC) oil output rose for the seventh month in January, possibly limiting WTI’s upside for the time being.

WTI outlook

“Medium-term, TD Securities sees WTI averaging around $55/b once the economy normalizes,” TD Securities analysts said in a report published last week. “Demand is on target to grow the expected 5.5 million barrels per day in 2021 and excessive supply growth concerns fade, with Brent a few dollars higher.”

Technical levels to watch for