Oil shot higher by over 3 percent overnight as the U.S. Crude Inventories dropped by a  massive 5.2 million barrels against a drop of 1.8 million expected. Brent spot traded as high as 50.35 and WTI spot to 47.60 before both saw late session profit taking to open in Asia at 49.90 and 47.30 respectively.

According to  Jeffrey Halley, senior market analyst at OANDA, with the OPEC production cuts almost certainly to be extended, oil may well have dodged the worst for now.

“However, it would be premature to call a bottom in prices as U.S. production continues to ramp up along with that of exempted OPEC members Libya and Nigeria. Compliance with cuts may also become a talked about issue in the second half of the year as production cut fatigue sets in amongst the OPEC and Non-OPEC parties to the agreement,” Mr Halley added.

This morning, both crude contracts open positively. Brent spot has resistance nearby at 50.35, the overnight highs, followed by 51.15, its 200-day moving average. Support lies at 48.50.

WTI spot has resistance at 48.50 and then 49.00, its 200-day moving average. Support lies distantly at 46.00 and then 45.50.