WTI stalls rebound, but regains $ 48 ahead of EIA report

Oil futures on NYMEX ran into resistances once again near $ 48.40 region, and dipped below 48 handle in Asia opening trades, before catching fresh bids to rise back above the last.

WTI eyes EIA inventory report

Oil prices stalled its rally seen in the US last session and dropped sharply in Asia, as oversupply concerns continue to dampen investors’ sentiment, especially in the wake of the latest EIA report, which showed that the EIA raised its 2018 US oil output forecast to above 10 million barrels per day.

However, the downside remains cushioned amid bullish API crude stockpiles report released late-Tuesday and looming tension in the Middle East. The latest API data showed that the US crude inventories fell by 8.7 million barrels in the week to May 26.

Focus now shifts towards the official inventory data from the EIA due to be reported later on Wednesday. At the time of writing, WTI trades modestly flat at $ 48.20, while Brent is muted just ahead of $ 50 mark.

WTI technical levels 

A break above $ 48.40 (key resistance) could yield a test of $ 49 (psychological levels) beyond which $ 49.31/36 (20 & 50-DMA) could be tested. While a breach of $ 47.75 (May 15 low) would expose $ 47.12 (NY low), below which downside opens up for a test of $ 46.50 (psychological levels).