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PVM Midday Report 10 December 2015

Published Thursday, December 10th, 2015


  1. Record Iraqi output pushes OPEC crude production up 230,000 bpd in Nov to 31.70 mbpd
  2. OPEC raises next year’s projected fall in non-OPEC crude oil supply to 380,000 bpd
  3. VW Chairman “cautiously optimistic” on outlook following emissions scandal
  4. UK trade deficit widens by £1 billion in October from September to widest in over 40 years
  5. Swiss National Bank and Bank of England leave interest rates at historic lows


Fundamentals: OPEC has forecast that non-OPEC crude oil supply will fall by 380,000 bpd in 2016, an increase of 250,000 bpd from last month’s estimate, and kept its forecast for next year’s oil demand growth unchanged at 1.25 mbpd. The organisation’s production, as seen by secondary sources, rose by 230,000 bpd in November compared with October to 31.70 mbpd as Iraqi output climbed by almost 250,000 bpd over the period.

Technicals: The trend remains down and the odds are on lower numbers. Three of the five contracts have targets lower to 35.52 WTI; 39.35 Brent; and 122.10 Heat. Jan’ Gasoil needs a move confirmed by a close (m/c) below 371.00 to green light an objective to 361.50. RBOB however having hit its objective to 119.62 has rallied and is now over the key 5 and 8 day MA around 123.68 and 126.71. A m/c over the 5 is constructive, but over the 8 makes being short the rest of the complex dangerous. RBOB has a history of giving early warning signals. In these conditions the targets south would look a lot safer if RBOB was below both the 5 and 8s. The trend is down. It is not advised to be long, but watch RBOB for guidance.

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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.