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PVM Midday Report 23 July 2015

Published Thursday, July 23rd, 2015

Headlines

  1. Iranian oil officials hint that its offshore tankers storing condensate rather than crude oil
  2. Beijing announces decision to allow more domestic refiners to make direct crude purchases
  3. Iranian oil tanker which set sail last week for Asia closes in on Shanghai
  4. Jointly-operated Wafra oil field set for prolonged shutdown after staff told to take leave
  5. UK retail sales for June miss expectations after volumes dip 0.2% from May

Oil                                                                                              

Fundamentals: China’s commercial crude oil stocks fell 2.1% in June from May while refined fuel oil stocks were up 3.8% and is most likely down to an estimated 2% rise in domestic refinery runs over the same period. This comes as Beijing announced that it will allow more Chinese refiners to apply for permits allowing direct imports of crude oil. Iranians oil officials have revealed that the up to 40 million barrels of oil mooted to be stored offshore on Iranian supertankers is in fact condensate and fuel oil. One of its tankers holding stored oil which set sail towards Asia last week shortly after the nuclear accord has today changed course towards Shanghai after originally heading towards Singapore. Meanwhile, the Wafra oil field shutdown is expected to be prolonged after staff were told to take leave from the start of next month as a long standing dispute between joint-operators Saudi Arabia and Kuwait goes on.

Technicals: Downside momentum is fading as RBOB makes an upward move thereby leaving its key support at 185.39 (200-day MA) firmly in its wake. However, only a m/c over 189.90 (5-day) would support the rest of the complex which remain below all their short-term MAs and therefore still have objectives lower to 47.80 WTI; 55.60 Brent; 164.22 Heat and 505.50/25 Gasoil. Bears are still in control of the market but will be uneased by RBOB’s relative strength which could yet again come to the rescue of the others.

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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.