WTI recovery losses steam, weakens back below $48.00 mark

WTI crude oil extended previous session's sharp rebound from the vicinity of $47.00/barrel mark and built on to its gains beyond the $48.00 handle.

The up-move, however, seems to have lost momentum near mid-$48.00s, with prices reversing daily gains and retrace back to the $48.00 region on worries over rising US crude stockpiles. 

Wednesday's recovery from yearly lows was led by data showing a decline in US gasoline and distillate stocks. However, continuous build-up in the US crude oil production remains a key overhang and seems to have collaborated towards capping any further up-move for the commodity. 

According to the EIA report, released on Wednesday, the US gasoline stocks fell by 2.8 million barrels in the week ended March 17, marking a fifth straight drawdown, and distillate stocks also fell by 1.9 million barrels. Meanwhile, crude supplies swelled by 5 million barrels, taking the total to a record high of 533.1 million barrels. 

Wednesday's data portrayed mixed picture to the market and hence, has failed to assist the commodity to extend its up-move. Hence, focus now turns to Baker Hughes rig count data, scheduled for release on Friday.

Meanwhile, a modest US Dollar recovery, ahead of the crucial vote on Trump’s healthcare bill, also seems to dent demand for dollar-denominated commodities – like oil, and collaborated to pull-back from higher levels.