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PVM Midday Report 06 July 2015

Published Monday, July 6th, 2015

Headlines

  1. Speculators in first ICE Brent crude net length increase since early May
  2. Iranian officials say dispute over its ballistic missile programme hampering nuclear deal
  3. Iraq’s SOMO cancels further 8 loadings of Kirkuk crude as Kurdistan withholds cargoes
  4. Adverse weather conditions force closure of Kuwait’s Shuaiba and Shuweikh ports
  5. German factory orders dip 0.2% m/m in May; ahead of predicted 0.4% drop

Oil                                                                                              

Fundamentals: The ongoing dispute between the autonomous Kurdish region and Iraq’s central government over crude exports shows no sign of resolving itself as eight further loadings of Kirkuk crude were postponed by Iraq’s SOMO due to Kurdistan refusal to transfer oil. The tally of cancelations now stands at 12 shipments totalling 8.4 million bbls. Iranian officials have revealed that differences over its ballistic missile programme remain one of the sticking points to a nuclear deal ahead of tomorrow’s deadline. Meanwhile, speculators have rediscovered their bullish appetite for ICE Brent crude after increasing net length for the first time in nine weeks by 6,889 lots to 198,633 in the seven days to June 30.

Technicals: The contracts are in poor condition and failing. The support has been moved below and were the market to close down here there would be further targets lower. WTI has an objective lower to 52.31 on a close below 54.87; Brent to 56.87 on a close below 59.04; Heat to 173.95 on a close below 178.73; RBOB to 195.25 on a close below 198.07; and Gasoil to 541.25 and on a close below here to 533.50. The key technical indicators are negative. The market is very vulnerable.

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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.