Oil surges through $49.00 mark amid optimism over OPEC output deal

WTI crude oil extended Wednesday's strong bullish trend and powered through $48.00/barrel mark, hitting 6-day peak amid increasing prospects of an output deal at today's OPEC meeting.

Currently hovering around $49.00 mar, the black gold added on to its earlier strong gains after comments from Saudi Energy Minister Khalid al-Falih that the country is ready to accept Iran output at pre-sanctions levels, 3.9 million b/d. The comments added to prevalent upbeat sentiment surrounding the commodity led by Iraq oil minister's statement that the country has also agreed to cut its output. 

Renewed optimism surrounding a deal to cut oil production and prop up global prices has now placed the commodity on track to post its biggest one-day gain since April.

Later during NY session, traders will confront the official EIA report on US domestic crude supplies, which if reaffirms Tuesday's API report and come-in to show further contraction in inventories should further prop prices, even from current levels. 

Technical levels to watch

From current levels, momentum above $49.00 mark is likely to confront resistance near $49.20 (Nov. 22 high), which if cleared should pave way for a further up-move towards reclaiming $50.00 psychological mark. On the downside, $48.00 round figure mark now becomes immediate support to defend, which if broken could drag the commodity back towards $47.35-30 support en-route its next support levels near $47.00 mark and $46.60 horizontal area.