WTI bounces off 3-week lows, recovers to $47.50 level

Having dropped to three-week lows below $47.00 mark, WTI crude oil staged a minor recovery and has now recovered back to mid-$47.00s.

Oil prices remained under heavy selling pressure for the fourth consecutive session following OPEC-led production cut deal extension, which seemed to have disappointed market participants expecting for a deeper cuts. 

The black gold accelerated the slumped during mid-European session on Friday and dropped to its lowest level since May 10 after the US President Donald Trump's decision to withdrawal from the 2015 Paris Climate Accord. Pulling US out of the global climate deal fueled speculation of a further acceleration in US drilling activity and added to persistent worries over global supply glut.

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Market seems to have largely ignored the latest API and official EIA data, showing a bigger-than-expected drop in the US crude oil inventories, which did little to stall the ongoing bearish slide in the commodity. 

Meanwhile, a sharp US Dollar slump, in wake of downbeat monthly jobs report, extended some support to dollar-denominated commodities – like oil, and is collaborating to the recovery move. Traders now look forward to the release of Baker Hughes report on US oil rig count for some fresh impetus.

Technical levels to watch

Immediate resistance is now seen near $47.80-75 region, above which the commodity seems all set to surpass the $48.00 handle and aim towards testing $48.50-55 resistance area. On the other hand, renewed weakness below $47.25 level, leading to a subsequent drop back below $47.00 handle, would turn the commodity vulnerable to extend the downward trajectory towards $46.65-60 intermediate support ahead of $46.00 round figure mark.