OIl gains more than 3% on the day, inventories data eyed

Crude oil prices recovered on Tuesday after sharp losses seen over the last couple of sessions as risk aversion triggered by the Brexit vote eased.

West Texas Intermediate crude oil futures advanced 3.3% to settle at $ 47.85 a barrel on Nymex.

Oil prices were also helped by news of a potential strike of Norwegian oil and gas workers that can limit production from the country, one of Europe’s major producers. Bargain hunting, as the commodity approached to $45.00 a barrel a level on Brexit jitters, also backed the intraday recovery.

Later on Tuesday, API will release its gauge of US crude inventories, which is expected to show crude stockpiles fell by 2.4 million barrels in the week ended June 24.

WTI technical view

“The daily chart shows that the benchmark is now trading around its weekly opening, with the price still below a mild bearish 20 SMA, and the technical indicators aiming modestly higher within negative territory, lacking enough upward momentum to confirm a steeper recovery,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price is currently extending above a bearish 20 SMA, whilst the technical indicators are struggling to re-enter positive territory, also limiting chances of a sharper recovery. Nevertheless, a continued recovery beyond 48.45, should keep the commodity up, with scope then to regain $50.00 a barrel.”

Support levels: 47.40 46.90 46.20. Resistance levels: 48.45 49.20 50.00.