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PVM Midday Report 03 July 2015

Published Friday, July 3rd, 2015

Headlines

  1. Chinese crude oil output expected to increase by 1.6% this year on 2014
  2. No Iranian nuclear breakthrough following visit by head of IAEA to Tehran
  3. Final Eurozone Composite PMI for June rises to four-year high of 54.2
  4. YES vote edging ahead in Sunday’s Greek bailout referendum – latest poll

Oil                                                                                              

Fundamentals: The visit to Tehran by the head of the IAEA has failed to produce a breakthrough regarding Iran’s disputed nuclear programme with a lot more work still needing to be done according to reports. Meanwhile, the global oil glut looks set be exacerbated by expectations that Chinese crude production is expected to increase by 1.6% to a record high this year from 2014 as rising output from the third largest state-oil company CNOOC offsets falling production from its two larger rivals.

Technicals: The contracts are struggling this morning, but not too much should be read into this. The US holiday will stifle significant participation making conclusions in either direction a bit of a waste of time. However, the key supports for the most part are holding albeit being sorely tested at the moment. WTI is on the key support at 56.42, as is Brent at 61.62. Heat is below similar key c/p support at 184.10, and Gasoil is over its support at 562.00. The hugely important RBOB has held the 5 and 8s around 202.43/19 and rallied to the 13 around 202.81. Whilst above the 5 and 8s the downside generally is limited and if above the 13 the odds are on tests of resistance for the rest. Watch RBOB – it will give the clues.

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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.