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PVM Midday Report 06 August 2015

Published Thursday, August 6th, 2015

Headlines

  1. Saudi Arabia raises September crude oil OSP to Asia by less-than-expected
  2. Kirkuk-Ceyhan pipeline resumes operations after week-long stoppage
  3. Chinese banks’ bad loan ratio climbs to highest since 2010 at the end of June
  4. BoE warns of subdued inflation in near-term; votes 8-1 to keeps rates on hold
  5. German industrial orders surge 2% in June from the previous month

Oil                                                                                              

Fundamentals: Saudi Arabia has raised its September crude oil OSP to Asian buyers by less-than-expected in what is seen by many as a sign of its intention to protect recent gains in its market share across the region. Downside pressures facing oil producers have been highlighted by Qatar which retroactively set the July OSP of its Marine crude to $55.70 bbl and down $5.55 bbl from the previous month. Meanwhile, crude oil flows along Iraq’s Kirkuk-Ceyhan pipeline have resumed after a week-long stoppage following a bomb attack by pro-PKK militants.

Technicals: The contracts have hovered around unchanged to slightly minus for most of the morning. Following yesterday’s failure at the 5 day MAs the market is vulnerable to further losses and likely to head lower. There are targets below current levels to 43.58 WTI; 48.90 Brent; Heat 148.71; RBOB 163.44; and Gasoil 453.75. Shorts should be run to these levels whilst the flat price stays below the 5 day MAs. The stochastics are negative. The trend is down – stick with it. Sell rallies to the 5 and 8s.

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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.