Oil looking vulnerable heading into inventories

Brent Oil (-0.55%) is trading lower on the day heading into DOE inventories at 3:30. A drawdown of 1.1M barrels is expected after a prior reading of -1.0M and if last night’s API is anything to go on, there could be a positive surprise in store. 

Should there be a strong build, not only in the headline reading but also the components then the market may come under pressure once more with potential support levels to keep an eye on 51.93 and 51.49 but a break below these levels would pave the way for a continuation of the recent downtrend to around the $50 handle.

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 Alternatively if we do find buyers stepping in here then the first hurdle for bulls to clear is 52.59 but if price can move above here then 53.63 becomes possible and maybe even a full retracement of last week’s declines from DOE to 55.09.