Crude futures strengthened from our bottom-end support yesterday despite higher than expected Crude Oil Inventories for the fourth straight week.

Despite the concerning increase in supply, crude is finding comfort in better than expected economic data from the U. S. coupled with depreciation of the Dollar.

Consequently, analysts are expecting rampant inflation in America. Improving economic data is encouraging to investors because it sparks the hope that production can pick up along with the consumption of crude.

Furthermore, a depreciating Dollar makes Dollar-denominated commodities such as crude more attractive for international consumption.

Finally, economists are cautioning about inflation, which implies rising crude prices. Crude futures are currently battling with March highs and appear poised to break out.

Considering crude futures have stabilized very well above our trend lines and the psychological $50/bbl area, crude is on the path to retest 2009 highs.

Therefore, we could very well witness large near-term gains. However, the psychological $55/bbl and January highs should each prove to be formidable foes to the upside.

Fundamentally, we find resistances of $54.52/bbl, $54.90/bbl, $55.45/bbl, and $55.98/bbl. To the downside, we see supports of $53.77/bbl, $53.40/bbl, $52.69/bbl, and $52.36/bbl. The crude futures are presently trading at $52.36/bbl.

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