WTI looks to extend the bounce above $47, EIA data on tap

• Attempts a bounce amid weaker US dollar and positive European equities.
• A dead cat bounce ahead of the US EIA crude stockpiles report?

WTI (oil futures on NYMEX) is seen reversing a part of its 7% slide witnessed a day before, as the bulls attempt a run to the 47 handle amid broad-based US dollar weakness and a positive tone seen around the European equity markets.

The greenback resumes the recent declines across its main competitors, as market prices-in a dovish Fed rate hike, in the face of mounting economic slowdown concerns, worries over yield-curve inversion and trade war risks. The Fed is widely expected to hike the rates by 25bps while calling for a slowdown in its tightening path for the next year.

Despite the bounce, the black gold remains exposed to serious downside risks and could retest the 17-month lows near 46.10 levels, as oversupply worries combined with the doubts over the OPEC output cuts continue to dent the sentiment around the commodity.

The American Petroleum Institute (API) data showed late-Tuesday that the US crude stocks rose unexpectedly last week, marking the first increase in three weeks while the US, Russian and Saudi Arabian output levels remain at record highs.

Markets now look forward to the official US government crude inventories data due to be published by the EIA later today at 1530 GMT for further price-action.

WTI Technical Levels