WTI clings to gains near mid-$48.00s, lacks follow-through

WTI crude oil gained traction for the second consecutive session on Wednesday.
The uptick was supported by data showing a larger fall in US crude oil inventories.
Hopes for a recovery in the fuel demand remained supportive of the positive move.

Haresh Menghani FXStreet

WTI crude oil held on to its intraday gains and was last seen hovering near the top end of its daily trading range, around the $48.40-50 region.

A combination of supporting factors assisted spot prices to build on the previous day's positive move and gain some follow-through traction for the second consecutive session on Wednesday. Oil prices remained supported by Tuesday's data from the American Petroleum Institute (API), which showed a bigger-than-expected decline in US crude oil inventories.

Apart from this, optimism about the likelihood of additional financial aid package and a strong global economic recovery in 2021 boosted hopes for a recovery in the fuel demand. This, along with a broad-based US dollar weakness, provided an additional boost to dollar-denominated commodities and remained supportive of the intraday uptick for crude oil prices.

In fact, the key USD Index weakened further below the 90.00 psychological mark and slumped to fresh multi-year lows amid the prevalent upbeat market mood. The already stronger global risk sentiment got an additional boost after UK regulators approved the use of the AstraZeneca/Oxford coronavirus vaccine, lessening demand for the safe-haven USD.

Despite the supporting factors, the positive move lacked any strong bullish conviction amid relatively thin trading conditions on the back of year-end holiday season. This, in turn, warrants some caution for bullish traders and makes it prudent to wait for some follow-through buying before positioning for any further near-term appreciating move.

Technical levels to watch

WTI

Overview
Today last price	48.47
Today Daily Change	0.42
Today Daily Change %	0.87
Today daily open	48.05

Trends
Daily SMA20	47.21
Daily SMA50	43.44
Daily SMA100	42.1
Daily SMA200	37.63

Levels
Previous Daily High	48.4
Previous Daily Low	47.69
Previous Weekly High	49.26
Previous Weekly Low	46.19
Previous Monthly High	46.31
Previous Monthly Low	33.85
Daily Fibonacci 38.2%	48.13
Daily Fibonacci 61.8%	47.96
Daily Pivot Point S1	47.69
Daily Pivot Point S2	47.34
Daily Pivot Point S3	46.98
Daily Pivot Point R1	48.41
Daily Pivot Point R2	48.76
Daily Pivot Point R3	49.12

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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