Oil futures on NYMEX extends yesterday’s rebound from four-day troughs and regains $ 49 handle in the European session this Tuesday, only to face fresh supply just shy of $ 49.50 barrier, as investors turn cautious heading into the US API crude stockpiles report due later in the American session.
Oil prices turned positive for the first time in four day on renewed hopes that the OPEC oil output cut deal could be extended beyond June, which brought the much-needed respite to oil markets.
However, rising US production poses a big threat, as markets believe that it would fill the gap the OPEC production cuts leave.
WTI technical levels
A break above 50/50.11 (psychological levels/ Mar 10 high) could yield a test of $ 50.64/84 (10-DMA/ Mar 9 high), beyond which $ 51.50 (key resistance) could be tested. While a breach of support at $ 48 (round number) would expose the 4-month lows of $ 47.09, below which downside opens up for a test of $ 46.50 (psychological levels).