Oil slides further, breaks below $49.00 mark

Extending its reversal from $50.00 psychological mark touched on Wednesday, WTI crude oil has now dropped back below $49.00 to currently trade near session low level of $48.90. 

On Wednesday, the black gold surged to retest $50.00 psychological mark after EIA report showed a higher than expected drop in US crude inventories, marking sixth consecutive weeks of constant declines. This was over and above API, on Tuesday, reported a drawdown of 3.9 million barrels in US crude supplies. 

The reports assisted oil prices to record second straight day of sharp gains on Wednesday. However, despite of a constant decline in US crude inventories, the commodity is witnessing selling pressure on Thursday and is led by bearish outlook by Goldman Sachs.

Adding to the bearish sentiment, a broad recovery in the US Dollar, as measured by the US Dollar index, is weighing on dollar-denominated commodities - like oil. 

Technical levels to watch

Sustained weakness below $49.00 handle should continue exerting selling pressure that seems to drag the commodity back towards $48.00 round figure mark support, below which it seems vulnerable to continue drifting lower and drop back below $47.00 handle to test $46.50 support. Meanwhile on the upside, $49.50 level now becomes immediate resistance to watch for. This is closely followed by a strong resistance near $50.00 psychological mark. Only a strong buying interest above $50.00 handle might now negate any near-term bearish bias and open room for further appreciating move in the near-term.