Oil futures on NYMEX are seen extending its recovery mode into a second day this Thursday, remaining on track to book the first weekly gain in four weeks.
The black gold rallied $ 2 from yesterday’s lows on the back of a bullish EIA crude inventories report, which showed a bigger-than expected drop in stockpiles last week. The US crude inventories fell 5.2 million barrels in the week to May 5. At 522.5 million barrels, crude stocks were the lowest since February, Reuters reported.
Moreover, reports of the first cuts by Saudi Arabia to its Asian refiners since the commencement of the OPEC oil output cut deal, also lifted the sentiment around the commodity.
Meanwhile, recent comments from the Iraqi and Algerian energy ministers that favor extending OPEC-led output cut for 6 months, further fuelled the rally in oil prices alongside a broadly subdued US dollar.
Next of note for oil remains Friday’s US rigs count and CPI data, which will have significant impact on the USD-sensitive oil.
WTI technical levels
A break above $ 48.23 (weekly highs) could yield a test of $ 48.50 (psychological levels) beyond which $ 49.49 (50-DMA) could be tested. While a breach of $ 47.36 (daily low) would expose $ 46.93 (5-DMA), below which downside opens up for a test of $ 46 (zero figure).