WTI rebounds and turns positive above $46

Crude oil prices were able to record solid recovery gains following the initial negative reaction to the EIA report with the barrel of West Texas Intermediate reaching its session high at $46.72. As of writing, the barrel of WTI was trading at $46.50, up 0.1% on the day.

Although the EIA report showed a larger-than-expected draw in crude oil inventories, the underlying details revealed that the total daily production in the U.S. increased to 9.530 million barrels from 9.528 million barrels and weighed on crude oil prices. However, massive floods in Texas caused by Storm Harvey forced another major oil producer, Exxon, to shut down the majority of Beaumont Texas refinery units, continuing to hurt the supply from the U.S.

• EIA: US commercial crude oil inventories decreased by 5.4 mln barrels

"Texas is home to 5.6 million barrels of refining capacity per day, and Louisiana has 3.3 million barrels. Over 2 million barrels per day (bpd) of refining capacity were estimated to be offline as a result of the storm," Reuters said in a recent report.

Technical levels to consider

The barrel of WTI could face the initial support at $45.75 (Aug. 29 low) ahead of $45 (psychological level) and $43.80 (Jul. 7 low). On the upside, resistance could be seen at $47 (psychological level/Aug. 29 high), $48.20 (Aug. 28 high) and $49.15 (Aug. 14 high).

• Oil plays moving average ping pong and remains bearish – BAML