WTI pierces above $46 on larger-than-expected US crude draw

Crude oil prices gained further momentum on Thursday on the back of EIA's crude oil inventory report, pushing the barrel of West Texas Intermediate to a fresh session high at $46.50. After the initial reaction, the barrel of WTI eased back a little and is now trading at $46.20, up 2.4% on the day.

• EIA: U.S. commercial crude oil inventories decreased by 6.3 mln barrels

Lately, tables seem to have turned in the oil market. Since last November, OPEC's efforts to balance the market had been countered by the increasing shale production and rising inventories in the U.S. As the data finally suggest that the supply growth in the U.S. is calming down, OPEC's oil exports are picking up pace, not allowing crude oil prices to make a decisive recovery. Furthermore, Russia's opposition to the possibility of deeper production cuts is likely to continue to weigh on prices as well.

• Oil: Price drop reflects supply concerns – Deutsche Bank

Nevertheless, after losing more than 4% on Wednesday, the barrel of WTI was able to heave a sigh of relief today. However, it's still uncertain how long that recovery can last.

Technical outlook

$47.31 (Jul.4 high) could be seen as the initial hurdle ahead of $48 (psychological level) and $49 (100-DMA). On the downside, supports are located at $45 (psychological level), $44.50 (Jul. 5 low) and $43.75 (May 5 low).