WTI trims gains, still well bid above $49.00 mark

WTI crude oil extended overnight gains and touched fresh weekly highs beyond mid-$49.00s. The black gold, however, trimmed some of its early gains, albeit has managed to hold above $49.00/barrel mark.

Currently trading around $49.25 region, an unexpected drop in the US stockpiles supported the positive sentiment surrounding the commodity for the second straight session. On Wednesday, the EIA report showed the US crude oil inventories fell by 237K barrels during the week ended on March 10, having risen for nine consecutive weeks. 

Adding to this, a weaker US Dollar, against the backdrop of less hawkish Fed, also collaborated towards boosting demand for dollar-denominated commodities - like oil. The Federal Reserve on Wednesday raised interest rates by 25bps and signaled two additional rate-hikes during the current calendar year. 

Meanwhile, a goodish recovery in the US treasury bond yields helped the greenback to bounce off one-month lows and could be attributed to the commodity's retracement from higher levels. 

Moving ahead, broader market sentiment surrounding the greenback would remain an exclusive drive of the commodity’s move on Thursday ahead of the Baker Hughes rig counts report on Friday.

Technical levels to watch

Momentum above $49.60 level (session peak) could get extended towards $49.75-80 region, before the commodity eventually surpass the key $50.00 psychological mark and head towards testing its next hurdle near $50.70-75 region.

On the downside, the $49.00 handle now becomes immediate support to defend, which if broken could accelerate the slide towards mid-$48.00s support ahead of sub-$48.00 level support near $47.90-85 zone.