Oil turns positive ahead of EIA inventories report

Oil prices on both sides of the Atlantic stall its downslide, after having traded in the red zone for the second straight session.

Oil shrugs of API crude drawdown

Currently, both crude benchmarks recover losses, with Brent around $ 53.95, while WTI tests 51 levels. Oil prices attempt a minor-recovery, despite doubts over whether the OPEC oil output cut will actually help bring an end to the omnipresent oversupply concerns.

The downside remained restricted amid optimistic statements from Kazakhstan, UAE and Venezuela oil ministers that hit the wires last hours, reflecting their confidence that an OPEC-non-OPEC output cut deal will be reached this Saturday.

Also, bullish API crude stockpiles report, which showed a draw of 2.2mn barrels, supported the recovery in the black gold. Markets were expecting a smaller decline in inventories of close to 1.0mn barrels for the week. All eyes now remain on the EIA weekly crude reserves report due later in the American morning.

Brent oil technical levels

A break above $54.94 (previous high) could yield a re-test of the multi-month highs of $55.33 (multi-month tops). On the lower side, breach of support at $52.84 (Dec 1 low) would expose the psychological support of $51.50.”