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PVM Midday Report 22 July 2015

Published Wednesday, July 22nd, 2015

Headlines

  1. Two crude tankers load combined 1.35 million bbls at Libya’s Hariga and Brega oil ports
  2. OPEC not contemplating cut in production despite softer oil prices – delegates
  3. Iran warns against extension to agreed 10-year limitation on nuclear activity
  4. Bank of England policymakers unanimous in holding rates at historic low
  5. US mortgage applications index rises marginally by 0.1% in week to July 17

Oil                                                                                              

Fundamentals: Libyan oil officials have confirmed that two tankers have lifted a combined 1.35 million bbls of crude from the Hariga and Brega oil ports. Moreover, the ports of Ras Lanuf and Es Sider have remained closed while crude flows to the Zueitina port are still offline due to protests. OPEC delegates have dismissed speculation that this month’s drop in oil prices will prompt the cartel to reverse its strategy of prioritising market share over price stability. This comes as the OPEC crude basket price slips to a three-month low of $53.57/bbl. Meanwhile, figures from the API have forecast a build in nationwide US crude oil inventories and at the Cushing delivery hub of 2.3 million bbls and 885,000 bbls respectively.

Technicals: The downbeat outlook has been maintained as the contracts slip lower but only a conclusive close below the following supports will turn the complex unreservedly bearish: 49.90/69 WTI; 55.60 Brent; 161.36 Heat; 185.66 RBOB and 504.25 Gasoil. Downside potential will continue to prevail so long as the 8-day MAs remain above the price action. They are around 51.41 WTI; 57.27 Brent; 168.17 Heat; 191.18 RBOB and 519.55 Gasoil. Supports are therefore likely to come under sustained pressure and as a result it is not advised to be long.

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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.