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PVM Midday Report 08 July 2015

Published Wednesday, July 8th, 2015

Headlines

  1. August exports of Nigeria’s Bonny Light crude grade to rise to 166,000 bpd
  2. Iran offers “constructive solutions” to resolve outstanding nuclear disagreements
  3. Slumping Brent prices sends premium over Dubai crude to lowest since mid-2010
  4. Greece makes formal bailout request; updated package of reforms expected tomorrow
  5. US mortgage applications index jumps 4.6% in week to July 3

Oil                                                                                              

Fundamentals: Efforts to reach a final agreement on Tehran’s disputed nuclear programme have entered their final stage as a senior Iranian diplomat claimed that it has put forward solutions to resolve the outstanding disagreements. A loading schedule has revealed that exports of Nigeria’s Bonny Light crude are to reach their highest since January of this year at 166,000 bpd. Meanwhile, the recent plunge in Brent crude prices has seen its premium over Dubai crude fall to its lowest in more than five years with the prompt EFS standing at 0.59cts/bbl at pixel time.

Technicals: The market continues to be erratic as the contracts recover from an early dip to post modest gains. Nevertheless, the downtrend remains intact with the action still below the 5-day MAs at 54.06 WTI; 58.38 Brent; 175.84 Heat; 197.34 RBOB and 540.50 Gasoil. Rallies to the 5s are sells but closes above would signal a potential change of heart and shorts would be advised to protect their positions in such a scenario. Objectives lower remain greenlighted and therefore look for an eventual test of 49.88 WTI; 55.58 Brent; 168.58 Heat; 191.03 RBOB and 509.25 Gasoil.

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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.