Oil recovers on encouraging market news

Crude oil prices regained the upside, with WTI settling a $48.39 a barrel, and Brent above 52, following the release of an encouraging EIA weekly report.

The API reported late Tuesday a major draw-down on U.S. crude oil inventories of 3.595 million barrels, but a large increase in gasoline ones, weighing on the commodity during the Asian session. The EIA report released this Wednesday, showed that US domestic crude supplies fell by 3.3 million barrels for the week ended August 18th, slightly below market's forecast, but anyway seen as a good sign for the market as oil inventories accumulate a 70 million barrels´ decline from the peak in late March falling for eighth consecutive week.

Despite the daily recovery, the US benchmark remains in negative territory for the week, and the daily chart shows that while it extended its recovery from its 100 DMA, technical indicators are still struggling around neutral territory, heading higher, but without enough momentum. In the 4 hours chart, the intraday advanced stalled around a bearish 100 SMA, currently at 48.50, providing an immediate resistance, while technical indicators entered positive territory, with limited upward slopes, but anyway supporting additional gains on a break above the mentioned dynamic resistance.