Oil holding minor gains above $49.00 ahead of EIA inventory data

With global risk-on sentiment and receding fears of global oversupply, WTI crude oil future continues with its march towards the very important $50.00/barrel psychological mark.

Tuesday's recovery from $47.63 to $49.23 was led by API's weekly inventory data that showed US crude supplies declining by 5.1-million-barrels for the week ended May 20. Oil traders now turn their attention to EIA's official data on production and stockpiles, later during NY session. The data is expected to show crude oil inventory held by commercial firms decline by 1.7-million-barrels. The data would further boost the ongoing bullish momentum witnessed in the black gold.

Crude oil prices have rallied nearly 80% from 2016 low of $27.55 touched in Jan. and is currently holding comfortably above $49.00 handle and hence, seems more likely to extend its near-term upward trajectory.

Technical levels to watch

From current levels, $50.00/barrel remains immediate psychological mark resistance to conquer. A convincing break above this immediate resistance opens room for a further bullish spike towards Oct. 2015 highs resistance near $51.35-40 area, with some minor intermediate resistance around $51.00 round figure mark.

On the flip side, weakness below $49.00 level now seems to find immediate support near $48.50 level which if broken seems to extend the corrective move back below $48.00 handle, towards $47.80-75 horizontal support.