Oil recovers sharply, back above $48.50

After bottoming out below $48.00 level, WTI crude oil staged a remarkable recovery and moved back into positive territory to hit session high level of $48.74 before retracing to currently trade around $48.55-65 band.

The black gold gained traction during early US trading session, erasing most of its early losses that added to previous session's decline of over 2%. At session low level, touched during mid-European session, the commodity was down over 4% from weekly high level of $50.00 touched on Wednesday after the official EIA reported larger-than-expected drawdown in US crude oil inventories. 

Any further appreciation, however, might be capped as rise in the number of oil rig counts in the US might resurface concerns over global supply glut, which had been the key driver of the commodity's slump in past two-year.

Technical levels to watch

On the upside, bulls would look for momentum above $49.00 round figure mark, above which the appreciating move could get extended towards the very important $50.00 psychological mark. On the flip side, weakness back below $48.35-30 support could turn the commodity vulnerable to drop back below $48.00 handle and challenge session lows, which if broken should drag it immediately towards $47.60-55 support area.