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…
The contracts continue to lack harmony and the next leg is not clear. Most of the contracts have completed a price cycle with support holding and there are no targets lower. At the same time the price action on the majority is below the s/t MAs and there is no upside potential until there are moves confirmed by closes (m/c) above most of the s/t MAs. The best example of this lack of harmony is RBOB below the 5 day but above the 8 and 13 day MAs, whilst Brent, Heat and Gasoil languish below all these key s/t MAs. It’s advised to be patient and wait for developments before committing. WTI is above the 8 and 13 day MA around 59.90 and then has the 34 day round 59.53. Whilst a m/c below 59.90 would not be good it needs a m/c below 59.53 to green light an objective lower to 58.48 ( 55 day). Staying over the 8 and 13s is constructive but a m/c over the 5 day, around 60.37, is needed to give this contract a fighting chance of re-tracing to the recent highs at 61.82. Brent lacks punch at the moment and looks a bit vulnerable. It has no target lower whilst the 55 day around 63.37 and 100 day at 62.97 holds. A m/c below 62.97 would green light a leg lower to 61.67.
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