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PVM Midday Report 06 October 2015

Published Tuesday, October 6th, 2015

Headlines

  1. OPEC Sec-Gen keen on working with non-OPEC producers to address oil market imbalance
  2. Iranian crude oil exports set to fall to a seven-month trough of 830,000 bpd in October
  3. Russian Energy Minister reveals talks with his Saudi counterpart took place last week
  4. German industrial orders dip by 1.8% m-o-m in August; misses expectations of +0.5%

Oil                                                                                              

Fundamentals: In a blow to Tehran’s hopes of boosting crude oil exports following a landmark nuclear agreement with Western powers, total oil exports are set to dip to a seven-month low of 830,000 bpd in October. The fall is led by a 12% m-o-m dip in loadings to Asia which will be the third-consecutive monthly decline in oil sales to the region. OPEC’s Secretary General has given his backing to cooperating with non-OPEC producers in order to eliminate the current oil market surplus. This comes as Russian Energy Minister revealed that he held oil talks with his Saudi counterpart last week. Moreover, he claimed that Russia’s involvement in Syria will not undermine its relations with Saudi Arabia.

Technicals: The contracts are giving back some of their gains. This is not a huge surprise, but support needs to hold for any further upside to be realised. WTI must not close below the 45.37 (8-day MA); Brent below 49.09; Heat below 153.01; RBOB below 137.02 and Gasoil below 464.00. If the contracts can stay above these levels then there is a good chance of more tests of resistance. The market is still range bound and in the upper end of the range. It has more work to do yet.

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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.