Oil stages a tepid recovery after previous day’s slump

After once again breaking below $45.00 mark on Wednesday, WTI crude oil is attempting to recover some lost ground on Thursday and is currently trading at $45.40 level. 

The black gold on Wednesday was once again slumped to a two-month low, erasing all of its gains recorded in the previous session, after EIA report showed that the drawdown in US crude oil stockpiles during the week ended July 8 was slightly less that expected. 

Recent inventories data has been fueling concerns that a slower pace of decline in oil production might resurface worries of global supply glut and was seen weighing on oil prices. 

Next on tap would be BOE monetary policy decision, which would drive global risk sentiment and eventually drive riskier assets - like equities and commodity, including oil. Investors will also remain focused on the quarterly release of Chinese GDP, slated for release on Friday.

Technical levels to watch

On the immediate upside, $45.90-46.00 region seems to act as immediate resistance. This is followed by resistance near $46.50-55 region, which if conquered seems to open room for further near-term appreciation of the commodity, towards 50-day SMA near $47.90-48.00 region.

Conversely, sustained weakness back below $45.00 handle has the potential to drag the commodity below $44.00, towards testing its next major support near $43.75-70 region.