WTI hits fresh weekly highs on US inventory draw

Oil futures on NYMEX extended its winning streak and built on previous gains after the bulls were bolstered by a surprising drawdown in the US crude stockpiles.

Oil: Focus shifts to EIA inventory data

Currently WTI advances +0.64% to trade near fresh one-week highs of $ 53.66, now looking to retest multi-month highs posted previously at 54.51 levels. Oil prices traded firmer this Wednesday, stretching the bullish momentum into a fifth day today, in wake of bullish API inventory report released late-Tuesday, which showed a bigger-than expected drawdown of US crude oil supplies for the week ended Dec. 16. The US crude stocks declined by just under 4.2 million barrels. Markets had predicted a decline of 2.4 million barrels.

Moreover, a broad based retreat in the US dollar from fresh fourteen-year tops also collaborated to upbeat momentum around the black gold.  A weaker US dollar makes USD denominated cheaper for holders in foreign currencies.

Next in focus for oil remains the EIA inventory report due to be published later today, while trading activity is expected to remain largely subdued as markets begin to liquidate positions ahead of the year-end holiday season.

WTI technical levels

A break above $ 54 (round number) could yield a test of Dec 12 high at 54.51. While a breach of support at $52.70 (Dec 20 high) would expose the 10-DMA support of $52.46.