Oil drops back below $46.00 mark, focus remains on EIA data

Having posted a session high at $46.38, WTI crude oil maintained its bearish bias and has now dropped back below $46.00/barrel mark.

The black gold is now headed back to retest session low level amid broadly strong greenback, as measured by the overall US Dollar Index, ahead of ADP report, which is seen as a precursor for the official NFP data on Friday. 

Fading expectations of a production freeze agreement continues to drive the commodity lower. Adding to this, renewed worries of a global supply glut amid expectations of a build in US crude inventories is weighing on the commodity. 

The official data on US crude oil inventories from the Energy Information Administration (EIA) will be published later during US trading session on Wednesday.

Technical levels to watch

Follow through weakness below session low support near $45.80 is likely to get extended immediately towards $45.50 support, which if broken seems to drag the commodity back further towards $45.25 intermediate support ahead of $45.00 round figure mark support. 

Meanwhile on the upside, any recovery attempt above session high resistance near $46.40 region now seems to confront strong resistance near $46.90-$47.00 handle, which if conquered seems to lift the commodity towards $47.50-55 strong resistance.