WTI crude oil extended rebound from last week’s four-month lows and held with marginal gains above mid-$46.00s during European session on Tuesday.
Renewed optimism over increasing likelihood that OPEC-led supply cuts would be extended beyond agreed June deadline remained supportive for a mildly positive sentiment surrounding the black gold.
Despite of the up-move, investors remained cautious amid growing concerns over slowing demand and a relentless rise in US crude output, which seems to be negating efforts by other major producers to rebalance global oil supply and demand.
Hence, traders focus on Tuesday would remain glued to the weekly API report on the US oil and refined product stockpiles, due later during NY session. The data would be followed by official figures from the Energy Information Administration (EIA) on Wednesday and should provide fresh impetus for the commodity’s near-term direction.
Meanwhile, persistent greenback buying interest, with the key US Dollar Index building on to its gains beyond the 99.00 handle, further collaborated towards capping up-move for dollar-denominated commodities – like oil.
Technical levels to watch
Immediate resistance is pegged near $47.00 round figure mark, above which the up-move could get extended towards $47.55 resistance ahead of $48.25-30 strong hurdle. On the flip side, weakness back below the $46.00 handle is likely to drag the commodity back towards $45.30-25 support en-route $45.00 psychological mark.