Oil Extend Slide, Drops to Low Near $50.00
After hitting nearly one-year high of $51.64, WTI crude oil futures pulled-back on Thursday and extended the profit-taking slide on Friday and is currently trading just above the $50.00 psychological mark.
Thursday's slide was followed by three consecutive session of up-move, buoyed by supply disruption worries and falling US crude inventories. The official EIA report, released on Wednesday, showed US crude stockpiles fell by 3.2 million barrels last week.
Meanwhile, a sudden bout of buying interest in the greenback might have forced investors to take some profits off the table, ahead of next week's Fed meeting, which would determine the near-term direction for the greenback and eventually affect movement for dollar-denominated commodities, like oil.
Moreover, traders might have turned cautious over the sustainability of the commodity's sharp appreciation, in excess of 80% from a multi-yera low level of $27.55 touched in Jan. Nevertheless, oil continues trading abvoe $50.00/barrel mark.
Technical levels to watch
From current levels, weakness below $50.00 handle could get extended to test $49.75-70 support, below which the black gold could aim back towards $49.00 level support.
On the flip side, resumption of the near-term bullish momentum might now confront immediate resistance near $50.50 level, which is followed by resistance near yearly high level of $51.60-65 zone. A convincing break through session peak now seems to pave way for further near-term up-move towards its next major resistance near $52.50 level.