Oil inching towards $50.00 psychological mark

Extending its bullish momentum, WTI crude oil future continues to inch higher towards tapping $50 important psychological mark, level not seen since early Oct. 2015.

On Wednesday, the black gold rebounded sharply from session through level of $48.64 after the official report showed a larger-than-expected drop in crude inventories. According to the EIA's weekly inventory report, inventories fell 4.2 million barrels in the week to May 20, which was much larger than 1.7 million barrels of decline expected. EIA report was over an above API report on Tuesday that showed US crude stocks dropped by 5.1 million barrels last week.

Despite of two day's of sharp up-move, led by decline in stockpiles, the commodity remained below the $50/barrel mark. On Thursday, oil seems to make a fresh attempt to conquer this important psychological mark on broad profit-taking move in the greenback.

Technical levels to watch

On a sustained break through $50.00 mark, the commodity seems all set to extend its bullish momentum towards Oct. 2015 swing highs resistance near $51.35-40 region with some intermediate resistance near $50.60 and $51.00 round figure mark.

On the flip slide, inability to clear its immediate strong hurdle and any signs of profit-taking below $49.00 round figure mark, is likely to get extended towards $48.00 handle, which if broken now seems to trigger a near-term corrective move.