Crude oil prices were under pressure on Tuesday, falling 3 percent on rising U.S. output forecasts and global demand concerns.
Investors were also looking ahead to crude oil options expiration on Wednesday, which could prove to be a near-term bullish catalyst for the commodity that's seen a bounce over the last month, according to Bill Baruch of Blue Line Futures. Here's why.
• December is the most actively traded contract for WTI crude, Baruch said Tuesday on CNBC's "Trading Nation." Since December became the front-month contract, the commodity rallied by over 10 percent.
• "As prices rose, so did the appetite for call options as investors feared missing the move higher. The market was due for a pullback into options expiration," he added.
• "I'm telling clients to look for the market to stabilize for key support at $55. At this level, we want to look to buy, to go long," Baruch said.
• Crude oil, which settled lower on Tuesday at $55.70 per barrel, is set to retest $58 and hit $60, he said, particularly as the commodity's futures contract expires early next week.
Bottom line: As the crude oil options contract is set to expire on Wednesday, prices could see a boost, and Baruch sees oil headed to $60.
