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PVM Midday Report 24 July 2015

Published Friday, July 24th, 2015

Headlines

  1. Saudi oil output set to dip to 10.30 mbpd after summer period on falling domestic demand
  2. Nigerian September crude exports planned at 1.89 mbpd, down on 1.94 mbpd in August
  3. Caixin/HSBC Chinese flash factory PMI slips to 15-month low of 48.2 in July
  4. Preliminary July Eurozone manufacturing survey eases to 52.2 from June’s 52.5

Oil                                                                                              

Fundamentals: A source within Saudi Arabia’s oil industry has claimed that Saudi oil production will dip by around 300,000 bpd to 10.30 mbpd after the conclusion of the summer period as domestic demand falls. Meanwhile, Nigeria is expected to export 1.89 mbpd of crude oil in September, down from the 1.94 planned in August.

Technicals: A bout of pre-weekend profit-taking has given WTI and RBOB a helping hand to the upside but these are serving as selling opportunities with targets lower at 47.80 WTI and 185.27/16 still greenlighted. Heating oil still has an objective lower to its ultimate downside target at 161.36. Brent and Gasoil look like losing further value and are likely to test important support at 53.19 and 497.00 early next week. The bearish view is intact and shorts should only get concerned and cover their positions on a move and close over the following levels: 50.24 WTI; 56.47 Brent; 168.91 Heat; 188.96 RBOB and 513.75 Gasoil. Until then, rallies up to the s/t daily MAs are sells as are closes below important supports. 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.