Crude oil is still hovering around an area of interest at the $57-57.50 minor psychological level. A small double bottom has formed, signaling that a bounce is in order. In that case, price could still revisit the highs around $59 per barrel.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This means that the rally is more likely to continue than to reverse. Also, the 100 SMA is holding as dynamic support and might be enough to keep losses in check.

Stochastic is also heading north so crude oil price might follow suit. RSI is also moving up to reflect the presence of bullish momentum. A break below the area of interest, however, could draw sellers back in and lead to a move to the next floor at $55 per barrel.

As expected, the OPEC announced an extension of their output deal until the end of 2018 but crude oil refrained from rallying as the cartel is also looking into a review by June. This suggests that the deal could still be called off if the market is already overheating or prices are too high by then.

Russia’s participation still remains a question as of this writing as the meeting with non-OPEC members has yet to take place. Russia has been pushing for an exit strategy to prevent shocking the markets when the deal expires.

At the same time, rising geopolitical risk from North Korea as it conducted a missile test earlier in the week has also weighed on demand for commodities. API and the EIA reported reductions in supply but traders continue to anticipate a buildup owing to the resumed operations of the Keystone Pipeline this week.

The Baker Hughes oil rig count is due next and another large build could put more downside pressure on crude oil. A reduction in rigs, however, could keep it propped up.