Oil futures on NYMEX paused its recent winning streak and retreated from five-week tops on Tuesday, on reports that the White House proposed the sale of 50% of the US strategic oil reserves in its Budget released earlier on the day.
According to the Budget plan, the White House would sell off half of the nation’s emergency oil stockpile from 2018 to 2027 to raise $16.5 billion from October 2018, Reuters reports.
Moreover, latest comments from Kuwait oil minister, citing that ‘not everyone is convinced for 9-month extension’ of the OPEC oil output cut deal, also added to the downbeat tone around the black gold.
Additionally, oil prices remain on the defensive amid latest report published by Goldman Sachs analysts, which warns of 2018 oil glut amid optimism over OPEC cut extension.
However, over the last hour, oil is seen making minor-recovery attempts, as a potential extension of the OPEC output cut deal continues to underpin the sentiment around the commodity.
All eyes now remain on the API crude stockpiles report due later in the NA session for fresh impetus on the oil-price action.
WTI technical levels
A break above $ 51.50 (psychological levels) could yield a test of $ 52.65 (May 19 high) beyond which $ 53 (round number) could be tested. While a breach of $ 50.47/38/18 (5 & 200-DMA) would expose $ 49.72 (50-DMA), below which downside opens up for a test of $ 49.46 (10-DMA).