Technical & Fundamental Oil Reports Specialists

Follow us

At last some stock market relief

Published Thursday, August 27th, 2015

This relief was brought to us by the US and not by China. A late rally helped US stock indices close almost 4% higher recouping some of the losses of the previous six trading sessions. The rebound was partly due to comments from William Dudley, President of the New York Fed, who sees the chances of any imminent rate increase less likely now in light of the recent stock market trouble. The 2% rise in US July durable goods orders and the 2.2% increase in core capital goods orders also supported the rally.

The US rally is also helping risk appetite return in Asia where the Shanghai Composite Index is up 4% this morning and the Nikkei 225 index is printing more than 1% above yesterday’s settlement. As far as the Chinese economy is concerned, next Tuesday will be a crucial day as it will see the release of manufacturing PMI data. The country’s factory activity index is expected to have fallen to 49.7 in August which would be the weakest level for 3 years. If the forecast proves to be accurate, further pressure can be expected on the Chinese stock market which, in turn, should have a knock-on effect on other risky assets including oil.

US gasoline is bearish, the rest looks OK

Yesterday’s settlement prices might suggest otherwise but the latest statistics from the EIA on US oil inventories were not bearish. The immediate reaction after the release of the report was a sell-off but the actual numbers are not as bad as first appeared. The sell pressure came from gasoline. It is, therefore, not surprising that the NYMEX RBOB lost 837 points over the day whilst WTI finished 71 cents/bbl lower and Heating Oil 143 points down. Front-month RBOB/WTI crack lost another $2.80/bbl and closed at $18.31/bbl, $12/bbl below the high of $30/bbl less than a month ago.

to read the rest of the report, please click here

Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.