WTI catches fresh bids, re-takes $ 49.50 ahead of API data

Oil futures on NYMEX broke the Asian consolidation box, following the overnight recovery from a downward spike to $ 48.55 levels, now catching fresh bid to regain $ 49.50 barrier.

The recovery in the black gold gains traction in the European session, as the bulls derive support from the latest headlines, citing that Saudi’s Aramco plans to cut crude oil allocations to all destinations in Sept by at least 520,000 bpd.

Moreover, the prices also gained impetus on expectations that today’s API crude inventory report is expected to show a drawdown for the week ended Aug 4, according to a preliminary Reuters poll.

However, markets remain skeptical on the recovery mode, as rising US oil output levels combined doubts over the OPEC deal compliance continue to undermine the sentiment around oil. Meanwhile, a recovery in output at Libya's largest oil field, Sharara, could also restrict further upside in the commodity.

All eyes now remain on the weekly US supplies data due to be published by API later on Tuesday for the next direction. At the time of writing, WTI trades +0.18% higher at $ 49.48 while Brent trades modestly flat around $ 52.40.

WTI technical levels 

The resistances are aligned at $ 49.64/70 (intermittent tops), $ 50 (psychological levels), and $ 50.43 (Aug 1 high) while supports are located at $ 48.27 (20-DMA), $ 47.57 (100-DMA), $ 46.26 (50-DMA).