Oil Turns Flat to $50.40, Eyeing EIA Inventory Data for Further Direction
After hitting a fresh 8-month high level of $50.54, WTI crude oil prices retraced a bit from session high level to currently trade absolutely flat at Tuesday's closing high level of $50.40.
On Tuesday, oil rose and settled above an important psychological level of $50.00 for the first time since Oct. 2015 amid rising worries over a potential supply disruption after fresh attacks on Nigeria's oil industry. Adding to the supply disruption worries, API report on Tuesday that showed US commercial crude inventories fell by 3.6 million barrels last week, kept buoyant momentum intact.
Meanwhile, a decline in oil imports by China, world's second largest consumer after the US, underpinned the bullish momentum on Wednesday. Investors now look forward to the official EIA report on weekly US crude inventories, slated for release later during NY session.
In the meantime, dimming clarity on the timing of next Fed rate-hike move is likely to keep the US Dollar recovery under check and would eventually limit any immediate downside for oil prices.
Technical levels to watch
Corrective move back below $50.00 handle now seems to find immediate support at a previous resistance, now turned support, near $49.70-65 area. Below this immediate support, the black gold is likely to aim back towards $49.00 level support.
On the flip side, resumption of bullish momentum, assist the commodity through session peak resistance near $50.50-55 zone would now pave way for further appreciating move towards Oct. 2015 highs resistance near $51.35-40 area.