Oil building on its strength above $46.00 mark

Extending its Wednesday's sharp recovery from sub-$44.00/barrel mark, WTI crude oil is now comfortably trading above $46.00 level at day's peak of $46.35.

Crude oil witnessed a sharp up-move after the release of EIA's latest weekly report on US crude oil inventories report that showed inventories unexpectedly fell by 3.4 million barrels as against an expected gain of 100,000 barrels. The shortfall in inventories boosted crude oil prices higher back above $46.00/barrel.

Crude oil prices are now within striking distance of touching a multi-month high level of $46.75, earlier tested in late April. Sustained move to a fresh 2016 high now seems to assist the black gold to extend its upward trajectory in the near-term.

Technical levels to watch

From current levels, oil seems to make a fresh attempt to retest $46.75 multi-month high level resistance, which if conquered should open room for further appreciation towards Nov. 2015 highs resistance near $48.25-30 area.

Meanwhile on the downside, $46.00-$45.95 area now seems to have emerged as immediate support. Failure to hold this immediate support seems to drag the commodity back towards an important support near $44.50-40 zone. Weakness back below $44.50-40 support might negate near-term bullish bias, turning the commodity vulnerable to extend its near-term corrective move.