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PVM Midday Report 20 October 2015

Published Tuesday, October 20th, 2015

Headlines

  1. Exports of crude oil from Angola set to rise marginally in December to around 1.8 mbpd
  2. Iranian oil official hints at overseas investment in refineries to boost demand for its oil
  3. Libya crude oil output at around 440,000 bpd according to the head of its NOC
  4. Iraqi government forces retake refinery town of Baiji from IS militants
  5. ECB survey points to improving lending conditions for eurozone businesses

Oil                                                                                              

Fundamentals: Solid demand from Chinese buyers will see total crude oil exports from Angola rise marginally to around 1.8 mbpd in December from the 1.77 mbpd planned in November. Iraqi government forces along with the help of allied Shia and Sunni units have recaptured the refinery town of Baiji from IS militants. This comes as Libya carried out airstrikes against IS targets in the city of Sirte only a day after the head of its National Oil Company revealed that total Libyan oil output currently stood at around 440,000 bpd.

Technicals: The market continues to be under pressure. Key support is holding on Dec’ WTI at 46.09 (34 day) and Brent at 48.47. Heat has slid below its critical support at 144.92. The fact that the crudes are holding support is preventing the validation of targets lower. Should they fail then WTI’s first objective would be to 45.32 then 43.88; Brent to 47.60 then 43,83; Heat to 141.20; RBOB to 122.65; Gasoil to 427.50. The key technical indicators are negative and pointing to lower numbers. It is not advised to be long, although we will doubtless experience sharp sellable rallies.

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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.