WTI looks to stabilize near $ 49.50 ahead of EIA report

Oil futures on NYMEX consolidate the Asian recovery near the mid-point of 49 handle, looking to stabilize after the overnight drop, in the wake of bearish API inventory report.

The API data showed that the US crude oil inventories rose by 897,000 barrels in the week to April 21 to 532.5 million barrels. Markets were expecting a draw of 160,000 barrels.

The black gold remains under pressure amid resurfacing oversupply concerns, in the wake of record high US supplies and uncertainty over the extension of the OPEC oil production cut deal beyond June this year.

On Tuesday, oil prices staged a rebound from monthly lows on expectations of drawdown in the API weekly crude stockpiles report, and also on the back of profit-taking.   

Focus now remains on the official US government figures on crude reserves due to be published by the EIA later today. Also, the Trump administration’s announcement on the tax reforms plan will have some impact on the USD-sensitive oil.

WTI technical levels 

A break above $ 49.83 (Apr 25 top) could yield a test $ 50.38 (classic R2/ Fib R3) beyond which $ 50.65 (50-DMA) could be tested. While a breach of $ 49.03 (4-week lows) would expose the 48.76/75 (classic S1/ Fib S2), below which downside opens up for a key support at $ 48.