WTI: Will the recovery sustain ahead of API data?

• DXY weakness underpins.
• Bounces-back towards $ 58 mark.
• The US API crude inventory report eyed.

WTI (oil futures on NYMEX) extends its upbeat momentum into a fourth day today, as the prices find support from the looming concerns over supply disruption and broad-based US dollar softness.

WTI supported at $ 57.20

The barrel of WTI remains well bid so far this session, heading for another test of the $ 58 mark, as the bulls to benefit from the ongoing North Sea Forties pipeline outage, which continue to threaten the crude supplies.

Livesquawk reported the INEOS Spokesman, as saying that the company is still assessing repair options for Forties oil pipeline, adding that the timescale for repairs remains 2-4 weeks starting from Dec. 11.

Adding to the buoyant tone seen around the black gold, the latest report released by Bernstein Energy showed that the crude oil inventories are falling globally, as the impact of the OPEC output cuts is gradually seen.

The report read: “Global inventories now stand at less than 56 days (of demand) ... With OPEC’s decision to extend cuts, we expect that OECD inventories will reach the 5-year trailing average (2.83 billion barrels) by 3Q18 and long-term average (2.7 billion barrels) by year-end 2018.”

Further, broad-based US dollar weakness amid increased worries over the efficacy of the US tax overhaul bill also collaborates to the upside in oil prices. Later today, the US API crude stockpiles data release will help determine whether the prices would break above $ 58 handle.

At the time of writing, WTI trades +0.51% higher at $ 57.53 while Brent rises +0.43% to $ 63.70.

WTI Technical Levels

The resistances are aligned at $58.50 (psychological levels) ahead of $59 (Nov 24 high) and $59.85 (April 2015 tops). On the downside, supports are located at $57 (zero figure), $56.39 (50-DMA) and $55.82 (Dec 7 low).”