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PVM Midday Report 25 March 2015

Published Wednesday, March 25th, 2015

Headlines

  1. Chinese oil executive claims country’s commercial and strategic storages are almost full
  2. Reuters data reveals over 20 million bbls of Iranian crude stored offshore in supertankers
  3. Chinese fuel oil imports slump 30% y/y in Jan-Feb on rising taxes
  4. Iranian Foreign Minister insists removal of sanctions will be condition of any nuclear deal
  5. German & French business confidence climb to 8- & 34-month respective highs in March

Oil                                                                                              

Fundamentals: The impact of several increases on the fuel oil consumption tax by Chinese authorities has been highlighted by figures pointing to a 30% y/y fall in the country’s fuel oil imports over the first two months of the year to 2.86 million tonnes. The prospects for Chinese crude oil imports don’t fare much better after an executive from one of its state-owned oil firms claimed that the nation’s commercial and strategic storages are almost full. Iran has insisted that the lifting of all sanctions currently imposed against it will need to be a condition of any nuclear deal. Meanwhile, as oil traders ready themselves for the prospect of more Iranian barrels reaching the market, data from Reuters has revealed that the OPEC member currently has 20 million bbls of crude stored offshore in its supertankers.

Technicals: The contracts are firmer but an element of indecisiveness remains. Brent is above its 5 and 8 day MA and is flirting with its 13-day MA at 55.84, a close above which should bring further strength. WTI has breached 47.71 but this needs to be below tonight’s close in order to greenlight the next objective higher to 49.03 (34-day MA).

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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.