WTI extends the rebound above $ 48, API report eyed

Oil futures on NYMEX is seen trying hard to build onto yesterday’s recovery gains and now re-takes $ 48 mark, supported by renewed broad based US dollar weakness.

Moreover, comments from various oil producers, backing the case for the OPEC oil output  cut deal extension beyond June, also aids the recovery in the black gold from three-day troughs. Over the last hour, Iranian oil minister Zanganeh said that he sees extension of deal to cut oil output. Meanwhile, on Monday, Russia’s energy minster Novak also said that he sees a possible extension to oil output cuts.

However, markets remain wary whether the ongoing recovery would sustain, as surging US production and record-high inventory levels continue to dampen investors’ sentiment. All eyes now remain on the US API crude stockpiles report due later in the NA session for next direction on the prices.

WTI technical levels        

A break above 48.87/49 (20-DMA/ psychological levels) could yield a test of $ 49.31 (200-DMA), beyond which $ 50 (key resistance) could be tested. While a breach of support at $ 47.50 (psychological levels) would expose the 4-month lows of $ 47.01, below which downside opens up for a test of $ 46.50 (classic S2/ Fib S3).