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PVM Midday Report 10 July 2015

Published Friday, July 10th, 2015

Headlines

  1. IEA warns of further oil price fall on “massively oversupplied” outlook
  2. OPEC crude output up 340,000 bpd to three-year high in June of 31.7 mpbd – IEA
  3. Iran’s Foreign Minister reveals nuclear talks will continue this weekend
  4. Kuwait lowers August crude OSP to Asian buyers by 30cts/bbl from July
  5. French President welcomes “serious and credible” Greek economic plan

Oil                                                                                              

Fundamentals: In its latest monthly report, the IEA has painted a downbeat outlook for the oil market citing the significant oversupply which it warned could last well into next year and claimed that the bottom may still be some way ahead. Global oil demand growth for 2015 was trimmed by 0.1 mbpd to 1.39 mbpd, non-OPEC supply growth for the year was unchanged at 1 mbpd and OPEC output in June was estimated at a three-year high of 31.7 mbpd. Iran’s Foreign Minister has announced that talks aimed at securing a final nuclear agreement with western powers will continue this weekend after failing to reach a deal by today’s self-imposed deadline. Meanwhile, Kuwait has followed in Iran’s footsteps in reducing its August crude OSP for Asian buyers with a 30cts/bbl reduction on the month.

Technicals: The contracts are heading into the weekend on a positive note but more work is needed. With the exception of RBOB, all the contracts have tough resistance at the 13-day MA to overcome and it is only advised to acquire length should they be below the close come tonight. They are at 56.52 WTI; 60.62 Brent; 181.29 Heat; 557.50 Gasoil. RBOB has been the best performer of late and remains above its entire s/t MAs but needs a successful test of its 34-day continuation resistance at 204.63 to maintain the upward momentum. The current technical view is neutral with only a close over the aforementioned targets changing the outlook to bullish. Meanwhile, the downtrend will reassert itself should the 5-day MA supports be moved below.

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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.