Oil Erase Early Gains but Still Holding Above $43.00 Mark
WTI crude oil
prices erased its early gains to nearly $44.00/barrel mark to trade
absolutely flat from Monday's volatile session closing low of $43.30,
ahead of the weekly API inventory data.
On Monday, crude ignored
disruption fears on the back of the Canadian wildfires and declined
sharply on renewed concerns over supply glut. Canadian wildfires is
expected to have taken more than 2 million barrels a day of production
out of the market.
The American Petroleum Institute (API), an
industry trade group, will releases it report on US crude oil
inventories on Tuesday while EIA is scheduled to release its weekly
inventories data on Wednesday.
On Tuesday, prices got rejected
from $44.00 handle and area currently trading absolutely flat at
$43.40/barrel, still holding above $43.00/barrel mark.
Technical levels to watch
Weakness
below $43.00 immediate support is likely to find support at a previous
strong resistance area, now turned immediate support, near $42.45-40
zone. Decisive break below this immediate support could extend the
near-term corrective move towards the very important 200-day SMA
support, currently near $41.50 region.
On the flip side, prices
need to clear $44.25-30 resistance in order to gain some upside
momentum. On a convincing break through this immediate resistance, crude
seems to make a fresh attempt to climb back above $45.00 mark and
extend its up-move towards its next major resistance near
$45.90-$46.00/barrel mark.
