Oil rises sharply as US inventories drop

Oil prices surged to their highest level for the week, with the US benchmark advancing beyond $37.00 a barrel after the country reported a large draw in domestic stockpiles.

The US Energy Information Administration latest report showed that stockpiles fell by 4.9 million barrels in the previous week. Also, supporting the black gold were news coming from Kuwait said that there were "positive indications an agreement will be reached" on an output freeze during the OPEC and non-OPEC producers meeting scheduled for April 17th in Doha, Qatar.

WTI technical perspective

“Daily basis, the recovery extended up to the 38.2% retracement of the latest bullish run, after the price sunk near the 61.8% retracement of the same rally earlier this week. Still, the price remains well below its 20 SMA, while the technical indicators have barely corrected within bearish territory, all of which is not enough to confirm a continued recovery for the upcoming sessions,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical indicators have lost upward strength and turned flat after crossing their mid-lines into positive territory, while the price advanced above a horizontal 20 SMA, in line with the longer term outlook.”

Support levels: 36.90 36.20 35.50. Resistance levels: 38.15 39.20 40.10.