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PVM Midday Report 10 August 2015

Published Monday, August 10th, 2015

Headlines

  1. Speculators cut bets on rising ICE Brent crude prices by 16% in week to August 4
  2. Two OPEC delegates dismiss possibility of cartel holding an emergency meeting
  3. Eastern Libyan oil ports of Brega and Hariga set to load 2 million bbls this week
  4. JP Morgan trims 2015 average Brent and WTI forecasts to $54.50 and $48.50 bbl
  5. Sentix gauge of eurozone investor sentiment dips marginally to 18.4 in August

Oil                                                                                              

Fundamentals: A tanker is scheduled to load 600,000 bbls at Libya’s Brega oil port taking combined crude oil loadings at the eastern ports of Brega and Hariga for this week to over 2 million bbls. Two OPEC delegates have signalled that the organisation has no plans to hold an emergency meeting despite Algeria’s energy minster claiming earlier today that talks to do so were ongoing. JP Morgan has become the latest bank to trim its 2015 oil price forecasts with Brent and WTI now seen averaging $54.50 bbl and $48.50 bbl respectively. Meanwhile, financial speculators have taken another big chunk out of their net length in ICE Brent crude with positions trimmed by 28,718 lots to just under 150,000 contracts.

Technicals: The market looked like recovering a bit from the outset this morning. Only Brent and Gasoil started the day with targets lower and Brent’s is negated on a move and close (m/c) over 48.90 and Gasoil on a m/c over the 5 day MA around 471.00. The rest were neutral and waiting generally was advised. The contracts are trying to hold, but it’s not been profitable to believe in rallies for the last six months. WTI, Brent and RBOB are still all below the 5 day MAs around 44.65; 49.32 and 165.37 respectively. M/cs over here would point to some more recovery yet – up to the 8s around 45.51; 50.21 and 168.56 respectively. Heat is already over the 5 and 8s and should head for the 13 around 158.43, and Gasoil is at the 8 around 476.50 and a m/c over here would suggest a run up to 485.25. At these levels the stochastics are positive on all but the crudes. It’s advised to watch the 5 and 8s carefully and scale back shorts if there are m/cs over the 5s.

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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.