WTI off multi-month lows, but remains below $50.00 mark

WTI crude oil extended its rebound from more than three month lows touched in the previous session and moved cautiously higher, but remained below the key $50 psychological mark.

Currently trading around mid-$49.00s, off session peak level near $49.80 region, the black gold is on track for a steep weekly decline, in excess of 6%, amid persistent worries over surging US crude oil inventories. The sharp sell-off in the previous two trading session was led by the surprise increase in the US stockpiles. 

The latest EIA report, released on Wednesday, revealed the ninth consecutive rise in domestic crude supplies, with an increase of 8.2 million barrels, lifting total commercial inventories to a record weekly level of 528.4 million barrels. 

Investors have now turned cautious and seemed worried that a further rise in the US inventories would negate OPEC's efforts to rebalance the markets by implementing planned output cuts.

Meanwhile, growing prospects for an eventual March Fed rate-hike action continues to boost the US Dollar and is further weighing on dollar-denominated commodities – including oil.

Later during the NA session, the release of US monthly jobs report would now be looked upon for fresh trading impetus.

Technical levels to watch

On a sustained recovery back above the $50.00 handle, leading to a subsequent strength above $50.20 resistance area, could assist the commodity back towards $50.75 intermediate resistance en-route $51.00 round figure mark.

Alternatively, weakness back below $49.25 level is likely to drag the commodity back below $49.00 handle, towards retesting previous session’s multi-week lows support near $48.60 region.