Oil consolidates near 3-month tops ahead of API report

Oil prices on both sides of the Atlantic are seen in a corrective mode, although remains in close proximity to multi-month highs amid risk-on market profile.

Oil await API inventory data

Currently, both crude benchmarks trade with moderate losses, with Brent down -0.39% at $ 50.60, while WTI drops -0.55% to trade around $ 48.50. Oil brings a halt to its recent run of gains and consolidates the upside before the next leg higher.

The black gold edged lower this Tuesday on reports that the Iranian oil exports have hit pre-sanction highs. However, any bearish attempt is being rescued by ongoing optimism surrounding the oil markets, in wake of last week’s OPEC output cut agreement.

While comments from the Iranian leader delivered yesterday also continue to cushion the downside in the prices. Iranian President Hassan Rouhani said Monday that oil producing countries must take decisions to boost oil prices, suggesting negotiations with non-OPEC producers.

Attention now shifts towards the weekly US crude stockpiles report from the API due later in the NA session for fresh direction on oil.

WTI Technicals:

Carol Harmer, Founder at charmertradingacademy.com, noted, “Now we are slightly lower overnight....not much off the close...and still holding above 48.50 as we enter the European time zone....so we should hold around these current levels...we need to take out the 49.05 resistance however to keep short term bullish hopes alive...If we can do that we are on track to test 49.95 and then 50.65...”

“Now if we fail to hold over 48.30 take this as a sign that the short term mood has changed...47.75 is quite good under here and I feel that only a break of this 47.75/70 area will set alarm bells clanging and the bears to come out of hiding and retrace some of the recent gains....”