Brent oil jumps above 50-DMA on third weekly inventory draw

Brent oil is extending gains above 50-DMA levels after the US EIA reported a surprise third US weekly inventory drawdown.

At the time of writing, Brent was trading around $47.32/barrel. Prices are up for the third consecutive session. The Energy Information Administration (EIA) data released yesterday showed oil inventories registered a 600,000-barrel draw beating the estimated rise of 2.3 million barrels.

The initial trigger came from the API report released on Tuesday which too had shown a surprise drawdown. The net effect of the bullish inventory reports released this week overshadowed reports of Libya planning to double its exports over the next couple of weeks.

Brent Technical Levels

A break above $47.84 (100-DMA) above which the prices could target $48.20 (Sep 13 high) and $48.59 (Sep 12 high). On the other hand, a breakdown of support at $47.01 (daily low) would expose $46.72 (50-DMA) and $46.00 levels.