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PVM Midday Report 22 December 2015

Published Tuesday, December 22nd, 2015

Headlines

  1. IMF warns additional Iranian oil exports could send prices lower by $5-$15/bbl
  2. No impact on oil market fundamentals from lifting of US crude export ban – UAE
  3. Russia’s Novak reiterates that current tax regime could undermine 2017 oil output
  4. Bank of Spain lifts 2015 and 2016 GDP forecasts to 3.2% and 2.8% respectively
  5. German consumer morale to get 2016 underway on strong footing – GfK

Oil                                                                                              

Fundamentals: The IMF has warned that the imminent return of Iran to the oil export market could see oil prices fall by up to $15/bbl which in turn should add 0.3% to global GDP. Russia’s Energy Minister has reiterated that the country’s oil export tax regime may trigger a fall in domestic crude output in 2017. Meanwhile, striking a defiant tone, his counterpart from the UAE has claimed that the lifting of the ban on US crude oil exports will not affect market fundamentals and expressed hope that next year will see an end to the current oil demand/supply imbalance.

Technicals: After having hit targets lower the contracts are now struggling for direction. The one exception is RBOB which has once again de-linked from the rest after failing to hold above its nearest downside target at 119.62 and a m/c below would greenlight a move lower to 117.63/50. The others continue to have objectives lower while below the 5 day MAs. These targets are 35.35 Feb’ WTI’ 36.20 Brent; 108.74 Heat and 323.50 Gasoil. The trend is still down but it is recommended to be flat until the contracts can muster a conclusive move and close below the aforementioned targets. 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.