Oil back below $45.00 mark, Monday’s rally turns out to be short-lived

Extending its sharp reversal from Monday's swing high level near $46.50 region, WTI crude oil has now dropped below $45.00/barrel mark as markets now look forward to the release of weekly crude oil stockpiles data from the US.

On Monday, the black gold rallied sharply after the world's two largest oil producers, Russian and Saudi Arabia, said that they will set up a working group, which will come up with recommendations to promote stability in the oil market. Markets, however, seemed unimpressed with the announcement as expectations were titled towards a fresh production freeze agreement. 

Earlier on Tuesday, a broadly weaker greenback, as measured by the overall US Dollar Index, boosted demand for dollar-denominated commodities, including oil. The up-move, though, turned out to be short-lived as attention now turns towards the weekly crude stockpiles report from the US, which of late has contributed to renewed worries of a global supply glut and has been weighing on the commodity. 

Technical levels to watch

Bulls will be disheartened if the commodity fails to hold $44.50 support area below which the reversal is likely to get extended initially $44.00 round figure mark and eventually towards $43.45 recent daily closing lows support. On the flip side, fresh buying interest above $45.25-30 immediate resistance seems to boost the commodity back towards $46.00 handle before making a fresh attempt to surpass $46.50 strong resistance.