WTI recovers from daily lows, stays below $57

• IEA revised up its forecast for U.S. oil output growth in 2018.
• WTI remains on track for third negative daily close.
• Friday's Baker Hughes data will be watched closely.

Crude oil prices extended their losses for the third straight day on Thursday and dragged the barrel of West Texas Intermediate to a fresh weekly low at $56.10. After finding support there, the barrel of WTI started to retrace its daily losses and was last seen trading at $56.50, still down 0.15% on the day.

IEA expects U.S. output to rise next year

In a report published on Thursday, the International Energy Agency (IEA) said that it was forecasting the U.S. crude output in 2018 to increase by 870,000 barrels per day (bpd), up from its November forecast of 790,000 bpd. The IEA also pointed out that the oil market could have a surplus of 200,000 bpd in the first half of 2018 before recording a deficit of about 200,000 bpd in the second half. Commenting on today's report, "The IEA underlined the same take that the U.S. Energy Department had the day before yesterday and OPEC had yesterday," Bjarne Schieldrop, chief commodities analyst with SEB Bank, told Reuters.

In his prepared speech on Wednesday, Mohammad Sanusi Barkindo, OPEC Secretary General, argued that the future of the United States' tight oil supply was uncertain.

Although the EIA's weekly report showed a larger-than-expected inventors drawdown in crude oil stocks, the report also revealed that the output grew by 0.8% on a weekly basis. The next critical data for oil investors will be released from Baker Hughes Inc. on Friday. An increase in the total number of active oil rigs in the U.S. could continue to weigh on crude prices.

Technical outlook

The first technical hurdle for the barrel of WTI aligns at $57.85 (Dec. 13 high) ahead of $59 (Nov. 24 high) and $60 (psychological level). On the downside, supports are located at $55.80 (Dec. 7 low), $55 (psychological level) and $53.90 (Nov. 1 low).