WTI looks to stabilize amid renewed supply glut concerns

Oil futures on NYMEX reversed a dip from daily lows and now make minor-recovery attempts amid fresh USD selling and as dust settles in the aftermath of bearish EIA inventory report.

Oil awaits OPEC cut implementation next year

Currently WTI trades modestly flat at 52.52, having stalled its retreat from weekly tops at 52.38, session troughs. Oil prices recover lost ground somewhat in early Europe, although remain on the back foot as markets continue to weigh latest reports of an unexpected crude inventories build, which reinforced supply glut concerns into the markets.

The EIA report showed that the US crude stocks posted a surprise build last week, climbing by 2.3 million barrels compared with an expected decline of 2.5 million barrels.

The recovery in the black gold can be mainly attributed to broad based US dollar weakness, induced by profit-taking as investors clear out positions heading into the New Year. A weaker dollar makes USD-denominated oil cheaper for foreign buyers.

Oil markets will remain at the mercy of the USD dynamics ahead of a series of crucial economic releases, while awaiting the US rigs count data for release tomorrow.

WTI technical levels

A break above $ 52.71 (daily high) could yield a test of daily R1 at 53.42. While a breach of support at $52 (round number) would expose the Dec 19 low of $51.51.