Oil trading weak but holds $46.00 mark, focus on EIA report

Following yesterday's remarkable recovery from two-month low level, WTI crude oil is trading with slight negative bias but has managed to hold its neck above $46.00 mark. 

Oil surged on Tuesday in what could be termed as a technical bounce led by short covering after dropping to a two-month low in the previous session. On Wednesday, oil traders remained on the back-foot after sources said API report showed US crude oil supplied unexpectedly rose by 2.2 million barrels during the week ending July 8. 

Moreover, traders might also be willing to lock-in some profits after yesterday's up-surge and cut down their exposure ahead of the closely watched EIA report, later during NY trading session, which is expected to show a drawdown of 2.3 million barrels in crude oil inventories. 

Any further disappointment from the inventory data would reignite concerns about a global supply glut and continue to weigh on oil prices in the near-term.

Technical levels to watch

On a sustained weakness below $46.00 level, the commodity seems to head back towards $45.10-$45.00 support region, which if broken opens room for further depreciating move in the near-term. Below $45.00 handle, oil is likely to extend its slide towards testing 100-day SMA support near $43.60-50 region.

Alternatively, strong buying interest above $46.50 immediate resistance has the potential to continue boosting the black gold in the near-term, towards 50-day SMA, support turned resistance, near $47.80-90 region.