Oil hovers near 6-month high ahead of inventories data

Oil futures advanced on Tuesday, holding near 6-month highs, amid speculation recent disruptions could lead to declines in US inventories.

West Texas Intermediate crude oil for July delivery gained 1.1% to settle at $48.62 a barrel on the New York Mercantile Exchange.

The EIA report to be published this Wednesday, is expected to show a 2.5 million barrels drop in the week ending May 20th. News coming from Iraq that output fell by around 0.3 million barrels per day due to some power outages also helped the commodity.

WTI technical view

“WTI consolidates at the higher end of its latest range, and the daily chart suggests that the commodity can extend it gains in the near term, as the price remains far above a bullish 20 SMA, whilst the RSI indicator turned back higher near overbought levels,” said Valeria Bednarik, chief analyst at FXStreet. “A break above 49.20 a strong static resistance level, should lead to a quick test of the 50.00 level, where selling interest will likely contain gains, at least temporarily.”

Support levels: 47.35 46.70 46.20. Resistance levels: 48.10 48.60 49.20.