WTI Crude oil prices extended the declines on Tuesday to fall back to the old support level near 38.835.
Price action since then has turned bullish. The gains come as it coincides with the weekly inventory report.
The US crude oil inventory report showed a drawdown of 2 million barrels. This helped oil prices to hold on to the bullish momentum off the support area.
With the current rebound, we expect oil prices to hold this new range between 41.0 and 38.835 in the near term.
Given the fact that the fundamentals are quite mixed, the outlook for oil prices also remains mixed.
To the upside, gains are limited to the 42.00 resistance level, while to the downside, a close below 38.835 could open the way toward a sharper correction.