Oil surpasses $48.00 with ease, now eyeing inventories data

WTI crude oil futures gained further traction on Tuesday and extended its upward trajectory beyond $48.00 mark to the highest level since Oct. 2015.

The black gold surged past $48.00/barrel mark for the first time since Nov. 2015 and tested a seven-month high level of $48.39. Analysts have turned bullish as supply disruption from the likes of Canada, Venezuela and Nigeria seems to offset the recent concerns over excess supply.

The overall US Dollar weakness in the past 24 hours also seems to extend support to the commodity. The US Dollar, as tracked by the US Dollar Index, has wiped out its Friday's gains registered after stronger retail sales and consumer confidence data. Adding to it, improving prospects of the UK remaining with the EU and less dovish than expected RBA, has boosted risk appetite around the British Pound and the Australian Dollar, sending the US Dollar further into negative territory.

Oil traders now await the API weekly stockpiles data on Tuesday ahead of the EIA's official report on Wednesday that would provide a fresh insight over oil demand-supply dynamics.

From technical perspective, daily RSI has just move above 70 level, indicating that prices might be entering near-term overbought territory. Hence, the market might see some consolidation or a minor corrective move in the near-term.

Technical levels to watch

On the immediate upside, $48.55-60 area seems to act as immediate resistance, which if conquered would pave way for a further up-move towards the very important $50.00 psychological mark resistance. This $50.00 mark also coincides with 100% Fibonacci expansion level of $27.73-$42.46 up-move and subsequent retracement, and hence, could cap any further up-move in the near-term.

Meanwhile, a corrective move is likely to get triggered once the commodity drops back below $47.70 immediate support, below which oil prices could test $47.00 resistance turned support handle.