WTI crude oil's tepid recovery bounce to $40.00 neighborhood got sold into, with prices now retracing back to currently trade with only marginal gains at $39.75 level. 

The black gold has failed to benefit from the API report that showed a decline in US stockpiles by 1.3 million barrels during last week. The report, however, seems to have provided some temporary relief and limited immediate downslide.

Meanwhile, the official EIA report, slated for release later during NY session, will provide the latest picture of the supply-demand dynamics and provide fresh impetus for the commodity's near-term direction. 

Oil traders will also confront the release of US economic releases that include - ADP report on private sector employment and ISM non-manufacturing PMI, which could have a direct impact on the greenback and eventually provide some immediate momentum play in dollar-denominated commodities, including oil.

Technical levels to watch

On the downside, weakness below $39.50 now seems to find immediate support near $39.00 round figure mark, below which the commodity is likely to extend its near-term downward trajectory immediately towards $38.00-$37.90 horizontal support.

On the flip side, recovery momentum above $40.00 psychological mark, leading to a subsequent break above 200-day SMA resistance near $40.20 region, seems to assist oil to extend its recovery trend towards $41.25-30 region before heading towards its next major resistance near $42.00 round figure mark.