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PVM Midday Report 09 November 2015

Published Monday, November 9th, 2015

Headlines

  1. Chinese crude oil imports fall by 5.7% to 26.35 million tonnes in October
  2. Speculators boost bets on rising ICE Brent crude oil prices by 13% in week to November 3
  3. OECD trims 2015 global GDP forecast to 2.9% from 3%; 2016 seen at 3.3% from 3.6%
  4. German exports and imports rebound in September by +2.6% and +3.6% respectively

Oil                                                                                              

Fundamentals: Chinese crude oil imports fell by 5.7% to 26.35 million tonnes in October from the previous month with imports of oil products plummeting almost 25% to 2.03 million tonnes over the same period. OPEC’s secretary-general has again expressed expectations of a tighter oil market next year with firmer prices as a result of dwindling non-OPEC supply and healthy global oil demand growth. This comes as a Saudi oil official rubbished the prospect of a new era of subdued oil prices after claiming that cutbacks in oil investments will eventually support prices as less supply comes online. Meanwhile, speculators have bolstered bets on rising ICE Brent crude prices in the week to November 3 with net speculative length rising by 20,722 lots to 181,929 contracts.

Technicals: The contracts have had a positive morning but the lack of harmony means that the market remains fragile. WTI and Brent remain below their s/t MAs and will need respective move and closes above 45.41 and 48.41 to look safer. Heat began above its 13 day MA and has since tested its 5 and 8 at 150.91/02 – a close above which will be constructive. RBOB has leapt above its key resistance at 139.34 and is supporting the rest. It must hold 137.93 for the overall complex to maintain any upside potential. Gasoil has mirrored Heat in climbing above its 5 and 8 day MA and has an objective higher at 458.75.

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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.