The price of crude oil is seen under pressure during the Asian session on Wednesday amid increase in supply. The technical bias however remains slightly bullish because of a Higher High in the recent upside rally.
As of this writing, the price of crude oil is hovering around $46.01 a barrel. A support may be noted near $45.90, the 38.2% fib level ahead of $44.36, the 50% fib level and then $44.00 that is the psychological number as demonstrated in the following daily chart of the crude oil.
On the upside, the price is expected to face a hurdle near $47.81, the 23.6% fib level ahead of $50.89, the swing high of the last major upside rally. A break and daily closing above the $50.89 could incite renewed buying interest, validating a move towards the $60.00 territory.
The American Petroleum Institute’s weekly crude inventory report showed a build of 7.1 million barrels last week for crude, though data on refined products was not immediately available.
Separately, a government report on Wednesday could show that U.S. stockpiles rose by 3.7 million barrels for the week ending on Oct. 16.
Also ahead, OPEC, the world’s largest oil cartel, will convene a special meeting on Wednesday in Vienna to discuss the current state of the global energy markets. Eight non-OPEC members, including Russia, Mexico and Brazil have been invited to participate in the meeting, Reuters reported.
In August, crude futures soared more than 25% in the span of three days, after reports surfaced that Venezuela had worked in conjunction with Russia to schedule an emergency OPEC meeting.
Considering the overall technical and fundamental outlook, buying crude oil on dips still appears to be a good strategy in short to medium term.