WTI looks to regain $ 46 mark ahead of EIA inventory report

Having rallied more-than 2.5% on Tuesday, oil futures on NYMEX have entered a consolidative-mode near four-day tops of $ 45.89 so far this Wednesday.

WTI eyes 50-DMA at $ 46.61

Oil prices keep the upbeat momentum intact and look to regain $ 416 handle, as traders continue to cheer bullish API inventory report, which revealed the US crude stockpiles declined three times more-than the forecast last week, while gasoline inventories also showed a surprising drawdown.

The API report showed that Crude inventories fell by 8.1 million barrels in the week to July 7 to 495.6 million, compared with expectations for a decrease of 2.9 million barrels.

The black gold also benefited from fresh signs of strengthening global demand, as indicated by a rise in products crack spread to the highest levels since late-May. The US heating oil futures rallied sharply yesterday, which helped boost the products crack spread.

Moreover, the latest EIA projections also added to the ongoing recovery in oil prices. The EIA report showed that US crude oil production in 2018 is expected to rise less than previously estimated.

However, it remains to be seen if the commodity can extend the gains above 46 handle, in the wake of the OPEC figures that show June oil output rise was led by Libya & Nigeria.

Also, increased cautiousness ahead of the US EIA inventory report and Fed Chair Yellen’s testimony could keep the bulls on the edge. At the time of writing, WTI rises 1.62% to $ 45.77, while Brent also jumps +1.43% to 48.20 levels.

WTI technical levels 

Higher side: $ 46 (key resistance), $ 46.61 (50-DMA), $ 47.10 (Jul 3 high)

Lower side: $ 44.94 (5-DMA), $ 44.51 (Jul 5 low), $ 43.67 (Jun 28 low)