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…
RBOB had failed to punch through the key 13 month MA at 215.35 by Friday and the contracts, as a result voted with their feet and headed south. The test of the 13 month MA represented a completed long term price cycle and one should be very careful as a result. Friday’s closes were not pretty but nor were they conclusive. WTI and Gasoil ended the day above the 8 and 13 day MAs but below the 5; Aug Brent above the 8, right on the 13, but below the 5; Heat below all the short term (s/t) MAs; and RBOB above them all. This is not a harmonious technical picture and this does not lend itself to significantly committing oneself in any direction. There are no targets lower until the action at the s/t MAs is clear – i.e. all contracts below – and there are no targets higher until the contracts can close back over the s/t MAs and RBOB has safely negotiated the highly hazardous 13 month MA at 215.35 – the strongest resistance on the board. Sit on one’s hands for a while and observe. WTI is above the 8 and 13 day MAs co-located around 59.72/66. A move confirmed by a close (m/c) below would be negative and point to a leg lower to 58.33, the 55 day MA, and then 57.45, a c/p. A m/c back over the 5 day around 60.41 would be positive and have this contract looking for higher numbers.
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