WTI flat-lined near $ 53 ahead of API data, holiday season

Oil futures on NYMEX recovered from lows, although remains stuck in an extremely narrow as low volumes and thin liquidity persists heading into year-end holiday season.

Oil awaits API inventory data

Currently WTI advances +0.26% to $ 53.20, taking on a minor-recovery from $ 52.85 region. Oil prices is trading lack-luster, although remains on the upper bound of the trading range seen so far this week, as markets begin to price-in positive effects of the output cut deal agreed  between OPEC and non-OPEC producers earlier this month.

However, the upside is likely to remain limited as the US dollar keeps its ongoing bullish momentum intact across the board, especially in wake of optimistic remarks by the Fed Chair Yellen on the US labor market and wage price growth. A stronger US dollar makes USD denominated more expensive for holders in foreign currencies.

The cautious behavior in the black gold is also in anticipation of the weekly supply reports from the US due today and tomorrow, the last ones for this year, which will provide fresh impetus to the oil markets.

WTI technical levels

A breach of support at $52.59 (daily R1) would expose the 10-DMA support of $52.35. While a break above $53.60 (daily R3) could yield a test of Dec 12 high at 54.51.