Crude oil prices continued to edge higher last week as prices rallied to fresh highs near the $72 handle but gave up the gains rather quickly.

Still, the continued bullish momentum in WTI crude oil prices indicates the strong underlying fundamentals.

With the markets now fully digesting the fact that Iran could soon be cut out from the international supply markets, there has been talk that Saudi Arabia could plug in the deficit.

On going conflicts within some of the OPEC nations also points to the fact that crude oil supply could see some shortages.

The political unrest in Venezuela is another factor that oil market watchers are expecting could hit the supply lines.

From a technical perspective, while oil prices have remained near yearly highs, the price action suggests that momentum on the bullish trend is slowing.

We continue to watch for a potential corection in WTI crude oil prices to the support level at at $66.55 – $66.00.

A short term support is seen forming near the $71.00 level. A convincing close below this level could potentially shift the short term trend to the downside.

However, a retest off the mentioned support level could mean that oil prices might be getting ready to surge higher.

The retest of the support at $66.50 – $66.00 however remains a key price level of interest.

In the event that WTI Crude oil prices break down below this level, we could expect to see an even sharper correction. The next main support is seen coming in at the $62.00 level.