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PVM Midday Report 02 September 2015

Published Wednesday, September 2nd, 2015

Headlines

  1. September WAF crude exports to Asia set to dip to 13-month low of 1.68 mbpd
  2. Russian crude oil production rose by 30,000 bpd to 10.68 mbpd in August
  3. Sales of Chinese oil products expected to rise in 4Q on rising domestic export quotas
  4. Bad weather forces suspension of operations at three Kuwaiti ports

Oil                                                                                              

Fundamentals: Exports of WAF crude oil to Asia are set to fall to their lowest in over a year this month with loadings planned at 1.68 mpbd, a substantial fall from the 1.84 mbpd recorded in August. Adverse weather conditions have forced operations at three Kuwaiti ports to be suspended until further notice. Russian crude oil production continues to hover close to a post-Soviet record high and was seen rising a tad to 10.68 mbpd last month from 10.65 mbpd in July. Meanwhile, the crude complex is coming under downward pressure from last night’s API figures which forecast a substantial 7.6 million bbl build in US crude oil inventories.

Technicals: The market’s overnight slide has been halted but it still looks very fragile. The action is now for the most part below the 5 and 34 day MAs, as resistance, and above the 8 and 13 day MAs as support. Until either extreme is moved and closed below there are no targets higher or lower. The levels that represent pivot support/resistance are on WTI around 42.87/45.31; Brent 47.37/50.00; Heat 152.34/156.36; RBOB 138.57/135.56; Gasoil 458.25/478.75. These levels need to be watched carefully. The odds are on the support holding and resistance coming under pressure.

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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.