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PVM Midday Report 30 November 2015

Published Monday, November 30th, 2015

Headlines

  1. Japanese crude oil imports fall by 5.7% year-on-year in October to 3.12 mbpd
  2. ICE Brent crude net speculative length rebounds by 19,208 lots in week to November 24
  3. Fitch warns of negative outlook for Russian economy; sees no oil price recovery in 2016
  4. German retail sales suffer unexpected dip in October; regional data points to firmer inflation

Oil                                                                                              

Fundamentals: Waning economic activity has triggered a sharp fall in Japanese crude oil imports in October according to official data after they were seen shrinking by 5.7% from a year earlier to 3.12 mbpd. Ratings agency Fitch has warned that it sees no oil price recovery in 2016 and as such the outlook for many oil-producing countries remains skewed towards the negative side. Meanwhile, financial investors have bolstered bets of rising ICE Brent crude prices as net speculative length jumped by 19,208 lots or 12% to a total of 177,945 contracts in the week to November 24.

Technicals: The contracts are looking more harmonious as they make an upside move towards the short-term MAs. One should be wary of Friday’s poor closes with limited participation over the US long weekend likely to have been misleading. As a result, all targets lower are on hold as long as RBOB holds above its vital support at 133.37 (5-day) and objectives higher have been greenlighted at 42.03 WTI; 45.48 Brent; 140.21 Jan’ Heat; 136.93 Jan’ RBOB and 423.75 Gasoil. However, care is advised and one should allow another 24 hours for the prevalent direction to bed in. Keep an eye on RBOB’s 5-day MA at 133.37.

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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.