WTI oil trades in red on Wednesday and extends pullback from fresh five-month high at $52.41, posted the previous day.
Fundamentals remain supportive as US API report, released on Tuesday, showed draw in oil inventories by 0.76 million barrels (the first draw after three consecutive weekly crude stocks builds), as optimism about oil market rebalancing rises.
On the other side, technicals continue to warn about correction, as daily RSI is reversing from overbought territory and reversal pattern (Evening Doji Star) is forming on daily chart.
Dips face initial support at $51.41 (Tuesday’s spike low), followed by daily Tenkan-sen ($50.80) and extended downticks expected to hold above $50.34 (Monday’s low / Fibo 38.2% of $46.99/$52.41 upleg).
Focus is on today’s release of EIA weekly crude stocks report which shows forecast for a build of crude inventories by 3.42 million barrels, compared to previous week’s build of 4.59 million barrels.
Res: 52.41, 53.00, 53.21, 53.77
Sup: 51.66, 51.41, 51.13, 50.80
