WTI erases daily recovery gains, looks to settle below $57

• OPEC plans to cut output by 1.4 million barrels.
• Russia shows no interest in additional supply cuts.
• The total number of active oil rigs in the U.S. rises to 888.

After closing the previous days higher, crude oil extended its recovery on Friday but failed to preserve its momentum in the second half of the day with the barrel of West Texas Intermediate turning flat near $56.50 in the last hour. As of writing, WTI was trading at $56.70, adding only 14 cents on a daily basis.

Reports of OPEC planning to introduce an additional output cut of 1.4 million barrels next year became the primary driver of crude oil's modest rally this week. However, citing two sources familiar with talks, Reuters yesterday reported that Russia was not interested in joining a new supply-cut agreement and made it difficult for oil prices to continue to rise. Meanwhile, the weekly report released by Baker Hughes Energy Services showed that the total number of active oil rigs in the U.S. rose to 888 this week to hint at increasing output.

Commenting on the latest developments in the oil market, "A relief rally was in the cards. OPEC is likely to be spurred to action as U.S. production continues to climb. Still, the day's gains were likely to be limited as traders were cautious going into the weekend," Bob Yawger, director of energy futures at Mizuho in New York, told Reuters.

Technical levels to consider

The initial resistance for the WTI aligns at $58 ahead of $59.30 (Nov. 13 high) and $60 psychological level. On the downside, supports are located at $55.90 (daily low), $54.75 (Nov. 13 low) and $53.90 (Nov. 1, 2017, low).