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PVM Midday Report 03 November 2015

Published Tuesday, November 3rd, 2015

Headlines

  1. Iraq suspends exports of Kurdish crude oil arriving at the Turkish port of Ceyhan
  2. TransCanada asks the US government to delay its review of the Keystone XL project
  3. Russia to draw on sovereign wealth fund by 2017 if budget deficit is not trimmed
  4. ECB releases report pointing to improvement in credit conditions as a result of QE

Oil                                                                                              

Fundamentals: The long running dispute over oil payments between Iraq’s central government and Kurdistan has returned to the fore after Baghdad halted exports of Kurdish crude arriving at the Turkish port of Ceyhan. The company seeking to build the controversial Keystone XL pipeline that would carry crude oil from Canada down to the Gulf Coast has asked the US government to suspend its review of the $8 billion project. Meanwhile, early Bloomberg estimates of the weekly update on US oil inventories sees crude stocks building by 2.1 million bbls with a 500,000 bbl fall at the Cushing delivery hub and a respective 1.3 million and 2 million bbl drawdown in gasoline and distillate stockpiles.

Technicals: The contracts have held and recovered well and look to be in resistance testing mode. The action continues to be dominated by the 34 day MA, a close above which would boost upside momentum. They are 46.42 WTI; 49.37 Brent and 459.75 Gasoil. Heat is above immediate resistance at 151.39 but needs more work to climb over its important target higher at 153.32. The odds of this occurring would be given a helping hand if RBOB can muster a close above its 55-day MA at 138.88 and as such this remains the most important resistance across the board. The key technical indicators are positive and higher numbers will be forthcoming on conclusive closes above 138.88 on RBOB and the 34s on the rest.

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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.