There are two upcoming events that are expected to impact the price of Oil; firstly, the Iran presidential election will be held this Friday, May 19th and secondly the OPEC meeting will be held on May 25.
The result of the Iran presidential election and the associated geo-political risks will likely affect its oil supply.
On May 8th, at the Asia Oil and Gas Conference in Malaysia, Saudi Arabia's Oil Minister, Khalid al-Falih, stated that "the output cut could be extended another 6 months or even further into 2018".
Oil prices have retraced 12.88% since April 12th and have experienced a 3.74% rebound since May 5th, due to technical correction and market expectations on OPEC's output cut extension in the Vienna meeting.
Last Wednesday's EIA crude oil inventory data saw a drop of 5.247 million barrels hitting the lowest level this year, in turn, pushing oil prices higher.
Oil Bulls have backed off recently after testing the significant psychological resistance level at $50. There appears to be Bullish momentum, but WTI will likely see selling pressure again at $50.
The US EIA Crude Oil Inventories data (for the week ending May 12) will be released at 15:30 BST this afternoon with a consensus of -2.360M. Please be advised that this release is likely to cause significant volatility in oil prices.
With a higher-than-expected figure, we will likely see a retracement lower and support areas tested.
With a lower-than-expected figure, we will likely see the price test higher resistances again.
The resistance level is at 49.30, followed by 49.60 and 50.00.
The support line is at 49.00, followed by 48.70 and 48.40.