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WTI tests $ 50 ahead of EIA inventory report

FXStreet (Mumbai) - WTI oil on NYMEX rallied on Wednesday, having booked heavy gains in the previous session, as oil traders cheer the news over declining US output while Russia’s willingness for oil market consultations keep the black gold supported.

WTI gains for the 4th straight session

Currently, WTI trades nearly 2% higher at 49.47, attempting another bonce towards 50 mark. The oil prices held onto gains and keep pushing higher as markets digest the latest reports from the EIA and API, both pointing towards falling US production.

The Energy Information Administration (EIA) in its monthly outlook published on Tuesday, stated that the US oil output fell by 120,000 barrels per day (bpd) in September m/m to about 9 million bpd, the lowest level since September 2014.

While the API crude reserves report showed that the inventories dropped by 1.2 million barrels for the week to October 2.

Markets now await the weekly EIA crude stockpiles report due later in the day for further momentum. The report is expected to show a rise of about 2.2 million barrels.

WTI Oil Technical Levels

WTI oil has an immediate resistance which stands at 50 (round number) levels above which gains could be extended to 51.38 (200-DMA) levels. Meanwhile, support is seen 48.58 (100-DMA) levels from here losses could be extended to 47.05 (5-DMA).

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