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PVM Midday Report 28 July 2015

Published Tuesday, July 28th, 2015

Headlines

  1. Chinese crude oil output expected to rise to 217 million tonnes in 2015
  2. Refined oil production in China on target to reach 294 million tonnes in 2015; up 3.1% y/y
  3. Iranian deputy oil minister claims OPEC member in energy talks with some 30 EU countries
  4. 2Q UK GDP growth accelerates to 0.7%; up from 0.4% in 1Q

Oil                                                                                              

Fundamentals: Chinese crude oil output is forecast to maintain a stable rate of growth of 0.4% this year with production rising to an estimated 217 million tonnes. Furthermore, refined oil production in China is expected to increase by 3.1% y/y in 2015 to 294 million tonnes. Meanwhile, Iran’s deputy oil minister has claimed that it is currently in talks with representatives from 30 European countries in a drive to boost much needed foreign investment in its oil and gas industry.

Technicals: The downside momentum has been maintained and the contracts are expected to put further pressure on supports. WTI has an objective lower to 44.20 (continuation low on January 13) whilst it remains beneath 47.80. Brent has moved conclusively below 53.19 and has duly tested the 52.57/50 range support, a close below which will be needed to guarantee further loss of value on this contract. Heat has dipped below 158.90 which represents the most important support across the board and should drag the rest lower if it is above tonight’s close. RBOB is expected to test its downside target at 178.48 in the not so distant future while profit would have been taken on Gasoil following its dip below 487.50 with bears now looking for a close under 481.00 to sell short once again. The trend is down and will remain so unless the 8-day M/A resistances are closed over. These are 49.10 WTI; 55.38 Brent; 164.17 Heat; 186.83 RBOB and 504.25 Gasoil.

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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.