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PVM Midday Report 20 May 2015

Published Wednesday, May 20th, 2015

Headlines

  1. OPEC Gulf members reportedly turning down Chinese demands for extra oil
  2. Iran’s Khamenei claims that it will not give in to “unreasonable demands” in nuclear talks
  3. Ghana oil production predicted to jump 600% to 242.3 million bbls by 2018
  4. Eurozone construction output climbs 0.8% on the month in March
  5. Greek official warns that next IMF loan repayment will be missed without debt deal

Oil                                                                                              

Fundamentals: Iran’s Supreme Leader Ayatollah Ali Khamenei has reiterated that it will not accept “unreasonable demands” regarding ongoing talks with western powers aimed at resolving its disputed nuclear programme. An executive from oil conglomerate Shell has told a summit in London that the Brent global oil benchmark does not need to be changed in the near future despite concerns of falling North Sea crude production. OPEC’s Gulf members have reportedly shunned Chinese requests for extra oil due to rising refining demands in the Middle East. Meanwhile, oil production in Ghana is predicted to jump 600% by 2018 to 242.3 million bbls from current levels of 39.1 mbpd according to the country’s finance minister.

Technicals: The market is holding. It hit or neared key intra-day targets and supports lower yesterday and these remain critical pivot points. These are on WTI at 58.46/37 (34 day MA) then 57.97 (8 month MA); Brent 64.35/31 (34 day and c/p); Heat 192.43 (5 month MA); RBOB 199.29 (200 day); and Gasoil 587.75 (8 month MA). These are last ditch – moves confirmed by closes below would be bearish and green light objectives lower. Holding would indicate a “bear trap” and would cause aggressive short covering. Watch these supports carefully today.

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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.