PVM Midday Report 13 June 2016
Headlines
OPEC hints at tighter oil balance in 2H 2016; output down 100,000 bpd in May
Chinese implied oil demand falls by 380,000 bpd in May y/y to 10.24 mbpd
Iran’s biggest oil…
Readers may be forgiven for concluding by yesterday afternoon that I had done my morning analysis with the charts upside down. I was constructive, however the market collapsed and we witnessed price carnage – apologies. Post mortems are pretty dull affairs at the best of times, but there were two vital ingredients to yesterday’s collapse that are relevant – firstly RBOB had completed a price cycle in the rally to the 34 day MA, and secondly all positive bets were off as soon as the contracts moved below the s/t MAs. The rest is history, and much more relevant is the question – what now? Today is going to be very dangerous. The collapse below the s/t MAs green lighted objectives back to the recent lows. These were to 92.50 WTI; 101.07 Brent; 280.80 Heat; 251.86 RBOB; and 852.50 Gasoil. WTI and RBOB have yet to hit these critical levels and are still above. The rest have closed below and have further targets to 99.67 Brent; 276.40 Heat; and 834.25 Gasoil. In order for further downside to be valid the contracts must stay below the following levels – 93.72 WTI; 101.07 Brent; 280.80 Heat; 255.61 RBOB; and 852.50 Gasoil.
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