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PVM Midday Report 17 July 2015

Published Friday, July 17th, 2015

Headlines

  1. Britain’s Buzzard oil field resumes production
  2. Chinese June output of gasoline & kerosene surges 8.9% & 19.5% y/y respectively
  3. Russia to meet OPEC at the end of the month; no likelihood of joint production cut
  4. German lawmakers debate Greece’s bailout programme; expected to back the deal
  5. Greek banks set to open on Monday after nearly three weeks of being shut

Oil                                                                                              

Fundamentals: Russia’s energy minister has announced that he is set to meet with OPEC representatives at the end of the month to discuss the Iran situation but any cooperative cut in production is unlikely after both parties recently agreed to let the market set prices. Chinese output of oil-related products was seen rising strongly in June with gasoline and kerosene production up 8.9% and 19.5% to 10.16 and 3.01 million tonnes respectively from the same period a year ago. Meanwhile, operations at the Buzzard North Sea oil field have resumed with production slowly coming back online following a shutdown on Wednesday night.

Technicals: The contracts are struggling for direction but the fact that they remain below all their daily short-term MAs and given the current state of the stochastics it is more likely that lower number will be on the cards. All bar RBOB have upside objectives to the 8-day MAs which are 51.94 WTI; 57.89 Brent; 170.47 Heat and 528.00 Gasoil while RBOB’s target higher is at the 100-day MA at 191.88. Should tonight’s close be below these aforementioned resistances we are likely to see a dip to 50.58/38 WTI; 55.60 Brent; 161.36 Heat; 186.37 RBOB; 504.50 Gasoil. The outlook remains bearish unless the contracts can muster a m/c over the 100 on RBOB and the 8 on the rest. Until then intra-day rallies to these levels are seen as selling opportunities.

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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.