WTI consolidates near 8-week tops ahead of EIA data

Oil futures on NYMEX maintain its recent upbeat momentum and hover near multi-week highs, as traders gear up for the EIA crude inventory report for the next push higher.

WTI: 200-DMA at $ 49.92 on sight

The black gold rallied hard a day before after the API crude stockpiles report showed a bigger-than expected draw in the US crude supplies. Crude inventories declined by 10.2 million barrels in the week ending July 21 to 487 million, compared with expectations for a decrease of 2.6 million barrels, the API data showed late-Tuesday.

Moreover, oil prices continue to derive support from slowing US shale output and Nigeria agreement to cap output in line with the OPEC output cut deal. Additionally, expectations of a drawdown in US crude stockpiles data that will be reported by the EIA, also keeps the sentiment underpinned around oil prices.

At the time of writing, WTI trades 0.88% higher at $ 48.31, while Brent rises +0.66% to $ 50.52.

WTI technical levels 

Jason Sen at DayTradeIdeas explains, “We are overbought short term so could still turn lower but we need prices to settle below 4820 this morning for the trade to work. We can then target 4790, 4745/40 & perhaps as far as support at 4715/10. Above 4870 is a buy signal despite overbought conditions, targeting quite important 3 month trend line & 200 day moving average resistance at 4940/45. Watch for a high for the day. Shorts need stops above 4980.”