FxWirePro: Crude Oil trades lower on rising US rig count, good to sell on rallies

• US crude oil hits high at $59.02 and shown a minor decline from that level.  The 14 – member OPEC along with 10 oil states outside OPEC has agreed to extend the production cut till 2018 year end. The crude oil prices recovered till $58.86 after OPEC meeting and started to decline. The production will also extend to Nigeria and Libya this time as previously exempt form production quotas due to political unrest.
   
• The oil prices is still declining after Saudi and Russia production cut deal. The main reason for the oil price decline is US shale oil production. US producers benefits a lot due to the production cuts. U.S oil production has already reached a record of 9.66 million b/d and is expected to jump 9.9m b/d in December. US total rig count increases by 6 this week to 929 and according Baker Hughes oil rigs drilling for oil up by 2 at 749 this week.
   
• Technically, oil is facing strong support at $57 (20- day MA) and any break below will drag the commodity to next level till $56.40 (61.8% fibo)/$56.10 (daily Kijun-Sen)/$55. The commodity should close below $54.10 (50 day MA) for further weakness.
   
• On the higher side, near term resistance is around $58.05 and any break above will take the pair to next level till $58.85/$59.02.

It is good to sell on rallies around $57.75-80 with SL around $58.85 for the TP of $56.45/$55.