Oil recovery now eyeing $45.00 level ahead of EIA inventory data

After dipping back below $44.00/barrel mark, WTI crude oil future recovered sharply to currently trade at the high point of the day at $44.80.

Earlier on Wednesday, oil prices were under pressure after API on Tuesday reported an increase in US crude stocks for last week by 3.4 million barrels. Later on Wednesday EIA is scheduled to releases its weekly inventories data. Of late, oil prices had remained under pressure of renewed worries over persistent surplus. The prices, however, have found support on disruption fears on the back of the Canadian wildfires that have taken more than 2 million barrels a day of production out of the market.

Extending its recovery from session through level, the commodity is now inching closer to $45.00 psychological mark. A sustained strength above $45.00 mark would indicate that the black gold might not have run out of steam and is ready to resume its prior appreciating move.

Technical levels to watch

Sustained strength above $45.00 level, the commodity seems all set to dart towards its recent closing high level important resistance near $45.95-$46.00 area. A clear break through this strong resistance would now pave way for further near-term appreciating move towards its next major resistance near $47.65-70 area, nearing Nov. 2015 daily closing high level.

Alternatively, failure to conquer $45.00 mark resistance and a subsequent drop back below $44.00 round figure mark support seems to open room for additional weakness, initially towards weekly lows support near $43.20-43.00 area and eventually towards March-April highs resistance turned support near $42.45-40 region.