Oil clings to strong gains near $51.00 mark ahead of EIA report

WTI crude oil edged higher on Wednesday and has now moved back above $51.00/barrel mark as oil traders now look forward to the official EIA report on US oil stockpiles.

Wednesday's gains in oil prices came after Saudi Arabia's oil minister, Khalid A. Al-Falih, said that many non-OPEC countries are willing to join a potential deal to cut global oil output in order to aid oil recovery and help stabilize the oil market. 

Adding to this, a broad based US Dollar weakness is also extending support to dollar-denominated commodities - like oil. Moreover, Tuesday's API report expecting a drop in US domestic crude inventories is also underpinning the commodity ahead of the official EIA data due later during NY trading session. Should the official data reaffirm API report, the black gold is likely gain further traction and continue scaling higher even from current levels.

Technical levels to watch

From current levels, $51.55-60 area remains immediate resistance to watch for, which if cleared decisively is likely to lift the commodity beyond yearly high resistance near $51.65-70 region towards reclaiming $52.00 mark. Meanwhile on the downside, $50.80-75 region now seems to act as immediate support below which the commodity is likely to correct back towards $50.00 psychological mark with $50.25-20 area providing some intermediate support.

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