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PVM Midday Report 29 October 2015

Published Thursday, October 29th, 2015

Headlines

  1. Saudi Arabia’s foreign asset reserves dips in September to lowest since November 2012
  2. US 3Q GDP slows to less-than-expected +1.5% from +3.9% in 2Q
  3. Spain and German price growth data points to firmer inflationary pressures in October
  4. European Commission gauge of economic sentiment climbs to four-year high in October
  5. Number of Germans out of work falls by 5,000 in October; jobless rate steady at 6.4%

Oil                                                                                              

Fundamentals: A combination of dwindling oil revenues and high budgetary requirements has caused Saudi’s foreign asset reserves to fall by 1.2% in September from August to $647 billion, the lowest in almost three years. Japanese crude oil imports rose in September by 1.1% from a year ago to just shy of 3.5 mbpd. Meanwhile, Russian exports of ESPO crude from the port of Kozmino are seen rising 0.7% on the month in December to 2.690 million tonnes on the back of robust Asian demand.

Technicals: It should not come as a surprise that the contracts are giving back some of yesterday’s significant gains but only a close below the s/t daily M/As will take the bullish edge off the whole complex. WTI and Brent have drifted below the 13s and must hold the 8s at 45.01 and 48.06 to maintain any upside potential and greenlight targets higher at 46.39 and 49.35. Dec’ Heat and RBOB have so far held important resistance with the latter’s 34-day MA at 133.07 the most crucial level across the board. A close above it will boost bulls’ confidence and see Heat and RBOB test upside targets at 151.20 and 140.46 respectively. Gasoil is holding its highest s/t MA at 446.75 (13) and must hold above 443.25 or it will likely dip to 427.50.

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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.