Oil reclaims $45.00 mark ahead of EIA report and Fed decision

WTI crude oil gained some more ground on Wednesday and is now trading around $45.00 mark as investors await for the outcome of Federal Reserve's two-day monetary policy meeting.

Tuesday's release of API report, showing a drawdown in US crude stockpiles by 7.5 million barrels last week, supported the commodity on Tuesday and triggered the initial leg of up-move. Later during early NY trading session on Wednesday, EIA is scheduled to release the official report on weekly US crude oil inventories and would provide fresh impetus. 

Meanwhile, renewed speculation over possibilities of a deal to freeze output among the OPEC members provided an additional boost to the black gold. Moreover, a fresh bout of selling pressure around the greenback, as depicted by the overall US Dollar Index, is also extending support to dollar-denominated commodities - like oil. 

Hence, investors would remain focused on the Fed announcement later during NY trading session. Strong hints of a December rate-hike would be highly supportive for the dollar, which would eventually weigh on oil prices. 

Technical levels to watch

From current levels, $45.50 area seems to act as immediate resistance above which the commodity seems all set to surpass $46.00 round figure mark and head towards testing its next major resistance near $46.60-70 region.

On the downside, $44.00 handle now becomes immediate strong support to defend. Failure to hold this immediate support now seems to drag the commodity back below $43.00 mark towards testing September monthly lows support near $42.55-50 area.