WTI catches fresh bids, re-takes $ 51

Oil futures on NYMEX finally broke its Asian consolidation box to the upside and jumped to retest $ 51 mark, as expectations of tightening supplies overshadowed concerns surrounding record high US crude reserves.

However, it remains to be seen if the commodity manages to sustain the bounce, as the greenback extends its post-Fed minutes recovery versus most of its majors. A stronger US dollar makes USD-denominated oil more expensive for the buyer in foreign currencies.

Moreover, bearish EIA crude supplies report also continues to weigh on the investors’ mind, which could also keep a lid on the prices. Besides, diminishing demand for risky assets ahead of the Trump-Xi meeting could also undermine the prices.

The black gold took a sharp U-turn and fell sharply from four-week tops on Wednesday, after the US EIA crude inventory report  showed an expected build in the US crude stockpiles last week. The US EIA report revealed an increase of 1.57 million barrels in crude inventories, bringing total U.S. stocks to a record of 535.5 million barrels, Reuters reported.

WTI technical levels 

A break above $ 52 (100-DMA) could yield a test of $ 52.92 (March 8 tops) beyond which $ 53.50 (psychological levels) could be tested. While a breach of $ 50.50 mark would expose 200-DMA at $ 49.62, below which downside opens up for a test of $ 49.18 (20-DMA).