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PVM Midday Report 27 October 2015

Published Tuesday, October 27th, 2015

Headlines

  1. Iranian President Rouhani expects nuclear sanctions relief by the end of 2015
  2. US set to sell 58 million bbls from strategic oil reserves under new government budget deal
  3. Saudi oil minister hints at potential rise in domestic energy prices
  4. UK 3Q GDP slows to 0.5% from 0.7% in 2Q as construction output slips 2.2%

Oil                                                                                              

Fundamentals: Iran’s President Hassan Rouhani has announced that he expects nuclear sanctions to be lifted by the end of 2015, thereby paving the way for an additional 500,000 bpd to be added to oil export markets come the New Year. Saudi Arabia’s oil minister has revealed that an increase in domestic energy prices may be on the cards as Riyadh contemplates introducing reforms to shore up its rapidly expanding budget deficit. Meanwhile, the US is set to sell 58 million bbls of crude oil from its strategic reserves between 2018 and 2025 under a new government budget proposal.

Technicals: The contracts are in trouble, and will remain this way whilst RBOB is below the 5 and 8 day MAs around 129.01/06. These are pivots. There are targets south on WTI to 42.78, valid whilst below 43.88; Brent to 46.90 valid whilst below 47.60; Heat to 141.27, valid whilst below 142.85, RBOB to 127.26, valid whilst below 129.01; and Gasoil to 427.50 valid whilst below 437.00. The stochastics are negative on all but RBOB. The outlook is grim, but beware of a “bear trap”. RBOB should be watched carefully. It will give the clues.

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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.