Oil building on Thursday’s bullish momentum, reclaims $51.00 mark

WTI crude oil was seen building on Thursday's momentum and has now moved back above $51.00/barrel mark, inching closer to multi-month highs touched earlier this week.

Despite of Thursday's EIA report that showed a sharp rise in US crude stockpiles, oil turned bullish on larger-than-expected drawdown in gasoline and distillate inventories. Moreover, a broad based retracement in the overall US Dollar Index also extended some support to Thursday's recovery momentum in oil prices.

On Friday, upbeat Chinese inflation data boosted investor appetite for riskier assets and is helping the commodity to extend its momentum. Focus now shifts to US economic data and the Fed Chair Janet Yellen's speech, which might provide fresh impetus for the greenback and eventually drive dollar-denominated commodities - like oil.

Technical levels to watch

From current levels, $51.20-25 area seems to act as immediate resistance above which the commodity seems all set to surpass multi-month high resistance near $51.60 level and aim towards reclaiming $52.00 handle.

On the downside, $50.55-50 zone (session low) now becomes immediate support to defend, which if broken might drag the commodity back below $50.00 psychological mark and head towards testing $49.60-55 support area.