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PVM Midday Report 10 November 2015

Published Tuesday, November 10th, 2015

Headlines

  1. Saudi hints at plans to diversify economy away from fossil fuels to limit carbon emissions
  2. Riyadh expected to tap international bond markets for the first time as early as next year
  3. Iran cuts its OSPs for crude grades destined to Asian buyers in December
  4. Brazil’s Petrobras and workers’ unions fail to end week-old strike
  5. China’s annual consumer price index slips to five-month low of +1.3% in October

Oil                                                                                              

Fundamentals: Saudi Arabia is expected to tap international bond markets for the very first time as early as next year with an initial offering of between $1-2 billion as it steps up efforts to cover its budget deficit caused by the slump in oil prices. Furthermore, a government spokesman in Riyadh has said that it plans to diversify its economy away from fossil fuels in a move which could prevent the release of up to 130 million tonnes of carbon emissions a year by 2030. Iran has decided not to follow in the footsteps of Saudi Arabia after it cut the OSPs of its crude grades for December loadings to Asian buyers. Meanwhile, in its annual global energy outlook, the IEA has claimed that oil prices won’t reach $80/bbl until the turn of this decade as a result of the enduring oil supply glut and underwhelming levels of demand growth.

Technicals: The contracts remain in trouble and the negative outlook is being led by RBOB this morning which has fallen below its crucial support at 137.38. As a result the rest have targets lower at 43.88 WTI; 46.41 Brent; 142.97 Heat and 437.00 Gasoil. More downside pressure will be expected if RBOB fails to close back above 137.38 – watch it carefully, it is the most important support level on the board. In the meantime, it is not advised to be long.

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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.