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PVM Midday Report 26 November 2015

Published Thursday, November 26th, 2015

Headlines

  1. Saudi Aramco announces that it will not cut oil production in 2016
  2. Chinese commercial crude oil stocks slip to 18-month low in October
  3. British PM Cameron makes the case for UK to join airstrikes against IS in Syria
  4. Fitch warns that China GDP growth will eases in 2016 & 2017 to 6.3% & 6% respectively

Oil                                                                                              

Fundamentals: The oil complex is softening after oil giant Saudi Aramco revealed that it will not cut oil production in 2016 in what is a clear hint that OPEC will leave its current production strategy unchanged at its December meeting. Further weakness is coming from Chinese implied oil demand data which is thought to have eased by 1.7% in October from September to 10.77 mbpd. This comes as Chinese commercial crude oil stocks registered their steepest month-on-month fall since at least 2010 in October to an 18-month low of 32.8 million tonnes.

Technicals: The contracts have dipped marginally but there remains room for more of an upside correction as long as RBOB holds above its 100 day MA support at 137.48. As such targets higher are greenlighted at 44.26 WTI; 47.15 Brent; 142.72 Heat; 143.25 RBOB and 443.25 Gasoil. The advice is to stick with the correction and watch RBOB at 137.48 which is the most important support on the board. Do not be short.

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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.