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.