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PVM Midday Report 07 October 2015

Published Wednesday, October 7th, 2015

Headlines

  1. Iraq hints that it may soon request the assistance of Russia in helping it to combat IS
  2. Yemen’s Aden Refinery receives first import of oil products since resuming operations
  3. Iran Supreme Leader reiterates that negotiations with the US are prohibited
  4. German industrial output slips by 1.2% in August from July; misses expectations of +0.2%

Oil                                                                                              

Fundamentals: Yemen’s 150,000 bpd Aden refinery has received its first import of oil products after only resuming operations at the end of last month following a six-month pause in which it was forced to shut down due to the country’s worsening security situation. Meanwhile, Iraq has signalled that it may put in a request for Russian air support against IS targets on its territory depending on the degree of success they have in ongoing air strikes in Syria.

Technicals: The contracts have maintained the move to the upside and drifted further beyond their 5-day MAs. The gap currently stands at about $3 on WTI and Brent which may prove to be too much and in turn trigger a downward correction. Nevertheless, targets higher remain greenlighted at 50.56 WTI; 53.26 Brent; 163.53 Heat; 144.90 RBOB and 500 Gasoil. The most important resistance is the aforementioned 144.90 correction resistance on RBOB, a close above which would give the rest a further leg up. Do not be short.

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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.