Technical & Fundamental Oil Reports Specialists

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Data disappointments

Published Friday, April 24th, 2015

Chinese, eurozone and US flash PMI numbers for April were disappointing coming in below expectations and below previous month numbers yesterday. Followers of Nasdaq however were not disappointed as the index reached an all-time closing high, beating the dot com record set in March 2000. If its vulnerability last time around was an average trailing P/E ratio of 72 this time it is more that Apple makes up 10% of the index.

Wolfgang Schauble must hate it every time Alex Tsipras meets up with Angela Merkel as he always gets some concessions. This time she appears to have conceded that Greece’s primary budget supply for this year can be cut to 1.5% – a level it still cannot meet. Having done the equivalent of raiding the piggy bank by calling in cash from municipalities, government-owned companies and even universities, Greece is now vigorously waving the Russian card which has put Washington in a flap. Supposedly it will get €3 to €5 billion in advance payments if it signs up to “Turkish Stream”. The key is that is it the US that controls the IMF purse strings and it is the IMF who is the blockage in agreeing to any debt repayment deferments. Will the IMF blink?

Oil prices hit new closing highs for the year at $64.85 bbl on Brent (+212) and $57.74 bbl (+158) on WTI. The resumption of Saudi air raids on Yemen may have brought in buyers whilst others may have been more influenced by weak data on US jobs, homes sales and factory activity betting that it will push a US interest increase down the road and lead to a weaker dollar. Our technical guru has spotted a positive turn in a long term bullish indicator but a nearer term worry for bulls is the close to record high levels of speculative length in Brent. The last time we were at such levels Brent was at $114 bbl in June last year. Three months later length had been cut be 200,000 lots and prices were $20 bbl lower.

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Posted by David Hufton