Oil hammered below $47.00 mark, API report eyed

Extending its sharp reversal from last week's 6-week high level above $49.00 mark, WTI crude oil got hammered for second consecutive day and plunged to a 4-day low to currently trade well below $47.00 handle as oil traders now look forward to weekly API crude oil supplies for some immediate respite.

Fading hopes of a production freeze agreement, on reports that Iraq might be preparing to ramp-up exports, is weighing heavily on the black gold, which has failed to benefit from a broadly weaker greenback, as measured by the overall US Dollar Index. 

Expectations that OPEC members would come-up with a collective measure to curtail output had been the key factor that supported the commodity's strong recovery gains for three consecutive weeks. 

Adding to this, continuous surge in production from China is further fueling worries of a global supply glut and exerting additional selling pressure around the commodity. 

Later on Tuesday, API report on US crude oil stockpiles will provide fresh impetus ahead of the official inventory data by EIA on Wednesday.

Technical levels to watch

From current levels, $46.50 seems to act as immediate support, below which the commodity seems to drop below $46.00 round figure mark and test $45.75 support area. 

Conversely, any recovery attempt back above $47.00 handle is likely to confront resistance near $47.50, which if cleared should assist oil prices to reclaim $48.00.barrel mark and head towards testing its next major resistance near $48.60 level.