Oil prices rebounded from the previous day's low on Thursday as the market awaited the gas stockpile data from the US energy information association and charts suggest crucial levels are yet to be broken for new multi-year lows in the commodity.
Brent crude for spot delivery rose to $57.37/bbl from the previous close of $56.02. On Wednesday, crude price had fallen more than 5% as the EIA data showed that the US oil stock has increased much more than expected.
The EIA will release the stock details of natural gas on Thursday and the consensus for the 3 April week is that the total stock would have increased 11 billion cubic feet (bcf), significantly reversing the 18bcf drop in the previous week.
Crude oil inventories rose 10.95 million barrels to a record 482.39 million in the week to 3 April, as per Wednesday's EIA data.
The gains in crude prices despite stronger dollar and outlook for increasing stockpiles could well lead to some bargain hunting after the sharp fall on Wednesday, according to analysts.
Goldman Sachs said in a note published on Monday that it saw little upside for its $40/bbl forecast over the next three months.
"Prices need to remain low in coming months to achieve a sufficient and sustainable slowdown in U.S. production growth," the bank said and added that the outlook for US production in 2016 in turn leaves risk to our $65/bbl forecast as skewed to the downside.
According to the investment bank US crude inventories would likely rise again by October, increasing downward pressure on prices into 2016.
While fundamental analysis predict further downsides for crude oil, technical charts show that the commodity has yet to break certain levels to get it to new lows.
Technically, oil prices are still keeping an upward trend that dates back to mid-January when the spot delivery Brent hit a multi-year low of $45.16/bbl.
A correction off that low took it to as much as $62.97/bbl in about a month. Then there was a southward shift, but it failed to break the $52.55 support, which was hit on 17 March.
As of now, the commodity has immediate support at $53.97 ahead of the mid-March low and then comes $51.38 and $47.51 before a retest of the January trough.
On the higher side, however, break of $60 seems to be a tough thing for now, and if it happens, then spot Brent will next aim $62 and eventually the February highs near $63. A break of that will ease the move up towards $70.