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PVM Midday Report 16 February 2015

Published Monday, February 16th, 2015

Headlines

  1. Speculators raise net length in ICE Brent to highest level since July ‘14 in week to Feb 10
  2. Kuwait to increase its oil and gas rig count by 50% by as early as 2016
  3. Russia’s oil export duty in March seen falling 6% m/m to $105.8/tonne
  4. Eurozone trade surplus climbs to record high in December on weaker euro
  5. Reports of shelling in eastern Ukrainian city of Vuhlehirsk puts ceasefire in doubt

Oil                                                                                              

Fundamentals: China has brought in new regulations aimed at helping smaller domestic refineries import more crude oil as the government seeks to attract private investment in a sector dominated by large state-owned enterprises. Lower oil prices are expected to force yet another cut in Russia’s oil export duty for March by 6% from the previous month to $105.8/tonne. Meanwhile, the recent rebound in oil prices has been reflected by speculators’ positions after they raised net length in ICE Brent to its highest since July of last year in the week ended February 10.

Technicals: The market continues to rally. WTI is less enthusiastic. There are valid targets higher on the remainder. Brent’s target is to 64.84 valid whilst above 60.08; Heat’s to 206.39 valid whilst above 196.14; RBOB to 177.24 valid whilst over 162.60; and Gasoil to 617.00 valid whilst over 574.00. Length should be run to here. The stochastic remain positive, but high. The contracts have broken out to the upside. It is not advised to be short whilst above key supports.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.