Oil Recovers Sharply to $44.40 Ahead of EIA Inventory Data
WTI crude oil
futures recovered from day’s low of $43.40 and has gained momentum in
last week hours, lifting it back above $44.00 mark to $44.40 level.
Renewed worries over rising supplies from the US and global growth concerns were dragging crude oil prices lower from its last week's peak of $$46.75. Moreover, the US Dollar's sharp recovery on Tuesday was also one of the factors that kept prices suppressed below $44.00/barrel mark.
The key even risk for today's recovery in crude oil prices is the EIA's inventories data, later during the US session. Tuesday's API weekly crude reserves report showed that the US crude inventories climbed by 1.3 million barrels in the week to April 29.
The commodity is attempting a move back above and important resistance near $44.30-40 area, marking 61.8% Fibonacci expansion level of $27.73-$42.46 upswing and subsequent retracement. A strong follow-up buying interest would be required to lift the commodity back above this immediate strong resistance.
Technical levels to watch
Above $44.50 level, the black gold seems all set to reclaim $45.00 handle, which if conquered would indicate resumption of the near-term up-move for the commodity.
Alternatively, reversal from current resistance level and a subsequent weakness back below $44.00 round figure would suggest that the commodity has formed a near-term top near $46.75, thus making it vulnerable to extend its weakness, even below $43.00 round figure mark, towards testing its next major support near $42.50-40 region.