Oil Fall Sharply to $48.00 ahead of EIA Inventory Data
WTI crude oil futures turned negative and dropped to session low of $48.00 on news (via Bloomberg) that OPEC member have not reached an agreement on output freeze.
Of late, the ongoing bullish momentum in oil prices stagnated near $50.00 psychological mark in absence of fresh fundamental triggers. Failure to reach an agreement on output ceiling at today's OPEC meeting could act as immediate trigger to aggravate the downside for the black gold.
In the meantime, traders would also focus on the weekly EIA inventory report that is expected to show a drawdown of 2.7 billion barrels. Should today's official EIA report matches API report that showed US crude stockpiles increased 2.35 million barrels, the black gold seems more likely be accelerate the move on the downside.
Technical levels to watch
Weakness below $48.00 round figure mark seems to get extended towards 2-week lows support near $47.40 before heading towards testing its previous strong resistance, now turned strong support, near $47.00 handle.
Meanwhile on the upside, momentum back above $49.00 handle might confront resistance near $49.60-65 zone, which is followed by the very important $50.00 psychological mark resistance. Only a sustained move above this strong resistance opens room for further near-term up-move for the commodity, towards testing Oct. 2015 highs resistance near $51.35-40 region.