Oil inter-markets: seems all set to test $50.00 mark, EIA report in focus

After a brief consolidative pause on Tuesday, WTI crude oil resumed with its near-term bullish momentum and has now risen to the highest level since late June. 

Currently trading around $49.65 region, the latest leg of up-move has been led by improving investor risk sentiment as depicted by reversal in the Volatility Index (VIX), which is further supportive of a recovery in the broader US equity index (S&P 500). Meanwhile, an upward trending longer-term (30-years) US Treasury bond yields is further reinforcing the black gold's ongoing bullish trajectory.

However, a broadly stronger greenback, as measured by the overall US Dollar Index, which directly impacts demand for dollar-denominated commodities, is restricting further upside for the commodity. Hence, it would be prudent to conclude that even a minor greenback retracement should assist the commodity to continue grinding higher.

Meanwhile, oil trader on Wednesday would also be focusing on the official EIA US crude inventory data, which if reaffirms API report showing the fifth straight weekly decline in US crude stockpiles, would further contribute towards the ongoing bullish trajectory and lift the commodity towards testing the very important $50.00 psychological mark.