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PVM Midday Report 14 December 2015

Published Monday, December 14th, 2015

Headlines

  1. Iranian crude oil exports predicted to hit six-month high of 1.26 mbpd in December
  2. Planned exports of Iraqi Basra crude oil forecast to jump 17% in January to 3.4 mbpd
  3. Speculators bolster bets of rising ICE Brent crude oil prices in week to Dec 8
  4. Eurozone industrial output climbs in October by 0.6% on the month and 1.9% on the year

Oil                                                                                              

Fundamentals: Crude oil prices are inching closer to their 2008-lows on expectations of a worsening supply glut following figures released today which point to rising crude exports from both Iran and Iraq. Iranian oil exports are on course to hit a six-month high of 1.26 mbpd in December as buyers increase purchases ahead of the anticipated removal of sanctions early next year. Planned exports of Basra crude from Iraq are seen rising to 3.4 mbpd in January which represents a jump of 17.2% from this month. Meanwhile, speculators have bolstered bets of falling WTI crude prices as net speculative length (NSL) fell to a fresh record low of 46,919 lots in the week to December 8. Conversely, NSL in ICE Brent crude unexpectedly rose by 12,312 lots over the same period to 182,708 contracts despite the price of the European oil benchmark plunging by over 9%.

Technicals: RBOB has joined the rest below all of its s/t daily MAs as the complex weakens and WTI, Brent and Heat push closer towards their downside targets at the Dec’ 2008 lows. They are 32.40; 36.20 and 112.52 respecteivly. RBOB is still someway off its 2008 low and instead has an objective lower to 123.95 as long as it remains below pivotal support at 125.60/50. Gasoil has a target to 308.75 valid whilst below important support at 351.50. The trend is down and relentless. Moves below the 2008 lows are on the cards. Sell rallies to the 5 day MAs. Do not 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.