Oil clings to gains above $47.00 level despite of a stronger USD

WTI crude oil edged higher on Tuesday and held on to its recovery gains to currently trade comfortable above $47.00 handle ahead of API report on weekly US crude stockpiles.

Fading expectations of a possible production-freeze deal from major oil producers has been a key factor that stalled the commodity's strong short-covering move since the beginning of August. An informal meeting of OPEC ministers will be held on the sidelines of an International Energy Forum industry conference towards the end of September.

On Tuesday, the black gold maintained its bid tone amid broadly stronger greenback, which continues to gain traction on increasing prospects of an eventual Fed rate-hike action by the end of 2016. Friday's release of US monthly jobs report, popularly known as NFP, would help investors to evaluate the possibilities of a rate-hike in September and determine the near-term trajectory for the greenback, eventually driving dollar-denominated commodities - like oil.

In the meantime, the API report on Tuesday ahead of the official data from EIA on Wednesday will be looked upon for fresh impetus for the short-term momentum play.

Technical levels to watch

From current levels, a follow through buying interest above $47.50 level is likely to get extended towards $48.00 handle before the pair makes a fresh attempt to head back towards $48.90-49.00 strong resistance. On the flip side, sustained weakness back below $47.00 mark is likely to drag the commodity back towards $46.50 support ahead of its next major support near $45.75 region.