Oil stable above $46.00 mark ahead of EIA report

WTI crude oil was seen digesting Wednesday's strong up-move and held on to its tepid gains but struggled to break through weekly highs ahead of a report on weekly US crude oil inventories. 

Currently trading around $46.20, off session high level of $46.46, the black gold surged on Wednesday after API report showed a drop of 12.1 million-barrels in US crude stockpiles. The commodity gained further on Thursday after Chinese government data showed another bid increase in the country’s oil imports that rose to a four-month high in August. 

Further gains were also capped amid tepid greenback recovery, as measured by the overall US Dollar Index. A stronger dollar usually dents demand for dollar-denominated commodities, including oil. 

Focus now shift to the release of official EIA report, which is expected to deviate from Wednesday's API data and show domestic crude oil inventories rose by 225,000 barrels last week.

Technical levels to watch

On the upside, $46.50 area remains immediate resistance, which if conquered seems to pave way for a move beyond $47.00 handle towards its next resistance near $47.35 level. Conversely, decisive weakness below $46.00 handle is likely to drag the commodity immediately towards $45.15 en-route a major support near $44.85 region.