Oil recovers losses in Europe, WTI nears $ 44 mark

Oil prices on both sides of the Atlantic extends its overnight retreat after the API stockpiles report failed to impress markets, and thus, capped further upside.

Oil awaits EIA report

Currently, both crude benchmarks pare losses to trade modestly, with Brent at $ 49.69, while WTI hovers around 46.80 levels. Oil prices stalled a 5-day winning streak and edged lower this session, largely on the back of a profit-taking slide after the recent run of gains.

While reports of Saudi Arabia’s record high output levels hit the sentiment around the black gold and hence, dragged the prices lower. However, hopes of potential OPEC action to freeze production levels keep the moods lifted. Further, renewed broad based US dollar selling also aids the recovery in the oil prices. A weaker US dollar makes oil cheaper for the buyer in foreign currencies.

On the fundamentals front, the EIA report showed that the US crude inventories fell by 2.5 million barrels last week, markets had predicted a build of about 400,000 barrels. Meanwhile, gasoline stockpiles fell by 2.7 million barrels last week, more than expectations for a 1.5 million-barrel drop.

Focus now remains on the US rigs count data for fresh cues on the oil prices. The US oil drilling rig count has risen without pause for seven weeks, signaling more production ahead.