WTI recovery gains capped ahead of US inventory data
|After yesterday's slump, WTI crude oil gained some traction on Thursday and edged higher before retracing from session peak to currently trade around $51.60 region.
The black gold got a boost from the latest weekly API inventory data that showed US crude supplies fell over 5 million barrels last week as compared to a build of 1.5 million barrels in the previous week. Adding to this, signs of fall in oil production by OPEC supported the commodity's up-move on Thursday. According to the latest data, OPEC cartel's production was lower by 221K bpd in December as compared to production in November.
Meanwhile, comments from IEA Executive Director Fatih Birol that output from US shale producers would react to recent price gains fueled skepticism over OPEC's efforts to ease global supply glut and take oil market back closer to a rebalance, eventually capping further gains for the commodity.
Investors now turn their attention to the official EIA report on US inventories, slated for release later during NY trading session.
Technical levels to watch
Momentum above $52.00 round figure mark, leading to a subsequent strength above $52.20 horizontal level, is likely to get extended towards $52.50 resistance area above which the commodity seems all set to aim towards reclaiming $53.00 handle.
On the downside, follow through selling pressure below $51.50 level might drag the commodity back towards $51.00-50.90 support area, which if broken decisively seems to pave way for further near-term downslide towards the very important $50.00 psychological mark.
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