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PVM Midday Report 05 August 2015

Published Wednesday, August 5th, 2015

Headlines

  1. API forecasts second-straight weekly draw in US crude oil inventories
  2. Caixin/Markit Chinese Services PMI for July climbs to 11-month high of 53.8
  3. Eurozone private sector business activity growth dips in July to 53.9 from 54.2 in June
  4. US mortgage applications index jumps 4.7% in week to July 31

Oil                                                                                              

Fundamentals: The API has forecast a second consecutive weekly draw in US crude inventories with stocks seen falling by 2.4 million bbls in the week to July 31. Moreover, stocks at the Cushing delivery hub are forecast to have dipped by 500,000 bbls. Gasoline stocks are expected to slip 1 mbpd while distillates are seen adding 1.7 million bbls.

Technicals: The contracts have continued to recover somewhat but the downtrend remains as long as the price action stays below the 5s. These are at 46.57 WTI; 51.13 Brent; 156.82 Heat; 172.38 RBOB and 481.50 Gasoil. Shorts should therefore run to targets lower at 43.58 WTI; 48.90 Brent; 148.71 Heat; 167.78 RBOB and 453.75 Gasoil. The trend is down – stick with it.

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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.