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PVM Midday Report 07 May 2015

Published Thursday, May 7th, 2015

Headlines

  1. Libya Nafoura oilfield closed – Two tankers to lift 1.7 million bbls from Hariga port
  2. Indonesia’s Energy Minister to ask President’s approval to re-join OPEC
  3. Iraq reveals chemical composition of its new Basra Heavy crude grade
  4. Saudi military considering ground operation in Yemen – spokesman
  5. German factory orders rebound 0.9% in March, misses expectations of +1.5%

Oil                                                                                              

Fundamentals: Indonesia’s Energy Minister has revealed plans to ask the country’s President for permission to re-join OPEC after having left the cartel in late 2008. Iraq has begun marketing its new Basra Heavy crude grade by releasing details of the oil’s assay, revealing that it has an API gravity of 23.55 degrees and sulphur content of 4.2%. A Saudi military spokesman has left open the potential for a ground operation in Yemen as it seeks to protect border towns which have come under mortar attack by Houthi rebels in recent days. Libya’s 35,000 bpd Nafoura oil field has shut down due to a pipeline blockage to a nearby port while two tankers are scheduled to lift 1.7 million bbls of crude at the eastern port of Hariga.

Technicals: It’s dangerous to write off up-trends when nasty corrections occur. The action yesterday was not great, but nor was it a huge surprise or particularly damaging. It was a correction and very possibly a “bear trap”. The close tonight will be a good guide. So far every contract bar RBOB has held the 5 day MAs and has firmed. This is text book up trend action. The only worry aspect of all this is RBOB. It is not only below the 5 day around 204.14 but also below the 8 day around 203.27. Whilst this is not extremely negative it does suggest a move down to the 13 day around 200.65 on remaining below the 8. Should this occur it would affect the rest too – hence caution today is necessary. The market is fine whilst above the 5 and 8, but keep an eye on RBOB.

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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.