WTI consolidates around $ 51 ahead of EIA report

Oil futures on NYMEX are seen trading around a flat-line so far this Wednesday, consolidating the downside after a 2% drop witnessed yesterday.

Oil eyes EIA stockpiles data

Currently WTI trades +0.31% higher at $ 51.97, easing slightly from session highs reached at $ 51.12 some minutes ago. Oil keeps its range-play intact as investors’ sentiment remains divided between several factors such as bearish API inventory report, OPEC & non-OPEC producers slashing outputs, doubts over OPEC deal non-compliance and a broadly stronger USD, as we head towards the official government release of the crude stockpiles data and Trump’s press conference.

Meanwhile, the American Petroleum Institute (API) reported a 1.5-million-barrel build in its latest data released late-Tuesday. Markets had forecast a 1.2 million-barrel build. This is the first increase to the crude reserves in eight weeks.

 Tim Evans, energy futures specialist at Citigroup noted, Oil prices "are consolidating at the lower levels ... after doubts emerged over the degree of compliance with OPEC production cuts as Iraqi exports remain high, as well as the more general pace of market rebalancing."

"Fresh reports that non-OPEC producers Russia and Kazakhstan have reduced output have produced little price reaction, with the failure to rally on bullish news suggesting that the market is overbought and vulnerable to a further downward correction."

WTI technical levels

A break above $ 51.50 (psychological levels) could yield a test of Jan 10 high of 52.37. While a breach of support at $ 50.71 (4-week lows) would expose the key support of $50.00.