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PVM Midday Report 27 November 2015

Published Friday, November 27th, 2015

Headlines

  1. Chinese oil giant Sinopec offers incentives for its refiners to boost diesel exports
  2. IEA sees India overtaking China as biggest contributor to global oil demand growth
  3. Chinese regulators widen securities-violation probe to several brokerage firms
  4. Second reading of UK 3Q GDP confirms initial estimate of +0.5%
  5. Greek economy shrinks by a more-than-expected 0.9% in 3Q

Oil                                                                                              

Fundamentals: China’s state-owed oil giant Sinopec has taken measures to address the growing domestic supply glut of refined-petroleum products as it announced a bonus scheme to its refineries in which they will be encouraged to increase their exports of surplus diesel. Meanwhile, the IEA has revealed that India is forecast to take over China as the single biggest contributor oil demand growth and its oil reliance is expected to rise above 90% by 2040. Moreover, it projects global oil investments will decline for a second straight year in 2016 with oil prices only gradually climbing back to around $80/bbl by 2020.

Technicals: The contracts have struggled for traction for a second consecutive day and upside targets are once again on hold so long as the price action is below or around the s/t daily MAs. The following downside objectives will have to be above tonight’s close in order to trigger lower numbers early next week and a potential trend reversal: 42.17 WTI; 45.55 Brent; Jan’ Heat 139.00; Jan’ RBOB 131.86 and 420.50 Gasoil. An upside correction should not be written off just yet but it is unlikely as long as Jan’ RBOB remains below pivotal resistance at 137.20.

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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.