PVM Midday Report 13 June 2016
Headlines
OPEC hints at tighter oil balance in 2H 2016; output down 100,000 bpd in May
Chinese implied oil demand falls by 380,000 bpd in May y/y to 10.24 mbpd
Iran’s biggest oil…
We painted a negative picture on the ICE contract a little over a week ago and an undecided one on NYMEX. ICE somewhat fulfilled its bearish expectations as it tested and closed below supports only to rally and close over resistances on Thursday. It is advised to be flat on this contract. The undecided NYMEX contract turned bearish last Tuesday and has not looked back ever since. This trend is expected to continue.
July ICE: The support where shorts were recommended to take profit was the 41.30 range on the expired June contract. The July equivalent of this is 41.80 that was tested and closed below on May 20 but the selling that followed through did not push the price down to the next profit-take level of 41.00, the daily contract low on January 20. Fresh shorts were forced to cut losses last Thursday when the 5 and 8-day M/As were closed above. They are currently at 41.69/63. The 13-day presently at 41.85, however, was not settled over on Thursday and Friday. Should it be closed above tonight it would be a buy for a rally up to the 34-day at 42.62.
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