Oil weak for fourth straight day, holds above $48.00 ahead of API report

WTI crude oil future extended its reversal from an 11-month high touched last week and dropped to $48.00 on Tuesday as traders trimmed their bullish bets amid global risk-aversion. 

Increasing uncertainty surrounding 'Brexit' continues to prompt near-term selling pressure in the black gold for fourth consecutive day. Moreover, rising US Dollar, on prospects of a potential Fed rate-hike in the near-future, has also been acting as near-term headwind for the commodity. 

Meanwhile, OPEC, in its monthly report, said its production fell by 100,000 barrels per day in May led by output declines in Nigeria, adding to worries over near-term supply disruption. The commodity also shrugged-off a bullish report from the International Energy Agency that revised the demand forecast for 2016 to 1.3 million barrels a day, up by 100,000 barrels a day from current 1.2 million barrels a day.

With all eyes stuck on the much awaited FOMC meeting outcome on Wednesday, traders will take immediate cues from today's scheduled API report on the US stockpile in the previous week.

Technical levels to watch

On the immediate downside, sustained weakness below $48.00 round figure mark seems to drag the commodity below $47.75-70 intermediate support, further towards testing a previous strong resistance, now turned strong support, near $47.00 handle.

On the flip side, the pair needs to regain momentum back above $49.00 handle before confirming the resumption of the previous appreciating move. Above $49.00 handle, the black gold seems all set to break past $49.65-70 resistance, before heading back above $50.00 psychological mark, towards retesting $50.40 resistance area.