US oil is consolidating around $46 handle in early European trading after falling in late Tuesday on disappointing crude inventories data.
American Petroleum Institute (API) report, released on Tuesday, showed unexpected rise in US crude stocks by 2.8 million barrels against forecast for 2.7 million barrels draw.
Oil remains under strong pressure on global oversupply and slowdown in demand.
The price is holding in a consolidation range after last week’s sharp fall with repeated upside rejections on Mon/Tue signaling limited recovery action and persisting downside risk, despite bullish signal on reversal of oversold slow stochastic on daily chart.
Oil is looking for firm break below cracked Fibo 76.4% support at $45.68 to open way for final push towards key support at $43.74 (05 May low).
Bearish technicals are supporting scenario.
Initial resistance, falling 10SMA ($46.62) stays intact for now and maintains bearish pressure.
Release of Energy Information Administration (EIA) weekly crude stocks report, due later today, is in focus for fresh signals. Draw in crude inventories by 2.7 million barrels is forecasted against last week’s unexpected build of 3.2 million barrels.
Res: 46.14, 46.62, 47.00, 47.78
Sup: 45.71, 45.55, 45.19, 44.62
