WTI stabilizes amid hopes of a tighter market in 2017

Oil futures on NYMEX stalled post-FOMC downslide and now extend the Asian recovery into the European session, as investors buy into renewed expectations of a tighter oil market next year.

Oil regains $ 51 and beyond

Currently WTI advances +0.37% to $ 51.23, moving away from fresh five-day lows struck previously at 50.81. Oil prices is seen on a steady recovery path so far this session, with the bulls now recovering ground further as the US dollar buying appears to have stalled over the last hour. A weaker greenback makes USD denominated oil less expensive for holders in foreign currencies.

Moreover, upbeat US EIA crude inventory report combined with markets eagerly awaiting oil markets to swing back into deficit next year, in wake of oil output cut deal reached between OPEC and non-OPEC producers, also collaborate to the renewed optimistic tone seen behind the black gold.

Meanwhile, the US EIA data published late-Wednesday showed that crude inventories last week declined more-than expected by 2.56 million barrels to 483.19 million barrels. Focus now shifts towards the US rigs count data due out Friday. In the meantime, oil will get influenced by the USD dynamics ahead of the US economic releases.

WTI technical levels

A break above $52 (zero figure) could yield a test of previous tops around 52.78 region. On the lower side, breach of support at $50.81 (five-day low) would expose the psychological support of $50.50.”