WTI drops 2% as Oversupply worries return

FXStreet (Mumbai) - WTI oil futures on the Nymex pared FOMC back rally and fell back in red today as a sharp recovery in the US dollar coupled with record high US supplies continue to dent investors’ sentiments.

WTI back below USD 46

Currently, WTI trades lower by -2% at USD 45.73/ barrel, moving away from fresh weekly highs reached at 47.48 in the previous session. Crude prices remains pressured following a bigger-than-expected increase in the US crude stockpiles, while a broadly stronger greenback, rebounding after the latest Fed statement induced losses.

Crude oil prices resumed its downtrend as traders digested news that crude oil stockpiles had jumped 9.6 million barrels in the week ending March 13, rising for a tenth straight week and bringing the total US reservoir to a fresh record high, according to the Energy Information Administration. Markets had been expecting a build up of some 4 million barrels.

Adding to this, oil stocks at Cushing, Oklahoma, rose almost 2.9 million barrels to 54.4 million barrels in the measured week, a record level since the agency started the tracking inventories for the delivery hub.

Crude Oil Technical Levels

WTI oil has an immediate resistance which stands at 46.63 levels above which gains could be extended to 47.48 levels. Meanwhile, support is seen at 45 levels from here losses could be extended to 44.03 levels.