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PVM Midday Report 11 November 2015

Published Wednesday, November 11th, 2015

Headlines

  1. Chinese implied oil demand rebounds 0.1% m-o-m in October on rising auto sales
  2. OPEC member Ecuador to push for oil output cut at December meeting
  3. Saudi to keep December crude oil volumes to Asia steady
  4. Kurdish crude oil exports ease marginally to 595,528 bpd in October

Oil                                                                                              

Fundamentals: Chinese implied oil demand was seen rebounding 0.1% on the month and by 0.9% on the year in October to 10.14 mbpd on the back of a solid increase in auto sales. Crude oil exports from Kurdistan via the Turkish port of Ceyhan have dipped marginally to an average 595,528 bpd in October as it continued to hold back from transferring any oil to Iraq’s state-owned oil company. An industry source has revealed that Saudi Arabia is to keep crude oil supplies to Asia steady in December. Staying with OPEC, Ecuador’s oil minister has claimed that the only way in which the oil market can rebalance itself is through an output cut which he will push for at the organisation’s December meeting.

Technicals: The contracts are on the back foot and have given into downside pressure but the technical picture is not harmonious as RBOB continues to hold key support at 135.72. WTI has a target lower to 42.78 whilst below 43.88. Brent has a valid objective lower at 46.41. Heat and Dec’ Gasoil look increasingly vulnerable and as such have targets lower to 142.97 and 434.00. RBOB is doing its best to buck the slide lower as it holds above 135.72 – a close below which would give the rest a further leg down. Nevertheless, the key technical indicators are mostly negative and lower numbers are likely. Rallies to the s/t MAs are sells. 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.