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PVM Midday Report 11 June 2015

Published Thursday, June 11th, 2015

Headlines

  1. IEA raises 2015 global oil demand growth by 280,000 bpd to 1.4 mbpd
  2. Chinese implied oil demand climbs more than 9% in May y/y to 10.31 mbpd
  3. IEA sees May OPEC oil output at 31.33 mbpd, up 50,000 bpd from April
  4. Iran increases July OSP for Iran Light to Asian buyers by 60cts/bbl on the month
  5. Greek jobless rate inches higher to 26.6% in 1Q ’15 from 26.1% in previous quarter

Oil                                                                                              

Fundamentals: The IEA has raised its estimate of 2015 global oil demand growth by a hefty 280,000 bpd to 1.4 mbpd in its latest monthly report. Moreover, it upped its forecast of non-OPEC supply growth this year by 195,000 bpd to 1 mbpd while also increasing its predicted call on OPEC oil by 100,000 bpd to 29.4 mbpd. Sign of an uptick in oil demand were also reflected by Chinese oil implied demand calculations for May which pointed to a 9% rise to 10.31 mbpd from a year earlier, according to Reuters. Meanwhile, solid appetite for crude has prompted Iran to raise the July OSP of Iran Light oil loadings destined for Asia by 60cts/bbl compared with the previous month.

Technicals: The weakening market should be no great surprise. It needed to cool off and the flat price was too far above the 5 day MA for comfort. The most important resistance on the board today is RBOB at 215.48 area – the 13 month MA. This tricky MA is not to be flirted with – it’s dangerous and care is advised. Yesterday’s high was at 215.06 and today, so far, at 215.60. A move confirmed by a close (m/c) would be very bullish. Meanwhile RBOB’s bull/bear (b/b) pivot is at 212.07, initial support, and it is well above the s/t MAs starting around 207.79. WTI is fine whilst above the s/t MAs starting around 59.90 – the 5 day.

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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.