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PVM Midday Report 14 January 2016

Published Thursday, January 14th, 2016

Headlines

  1. Iran removes core from Arak nuclear reactor; sanction relief seen as early as this weekend
  2. Oil and gas projects worth $380 billion scrapped or deferred since 2014 oil slump
  3. German economic growth improves to +1.7% in 2015; strongest performance in 4 years
  4. Series of bombings rocks Indonesian capital in latest suspected terror attack

Oil                                                                                              

Fundamentals: The Iran nuclear deal implementation day is inching closer and reports suggest that sanctions could be lifted as early as this weekend. This comes after Tehran confirmed that the core vessel of its Arak reactor has been removed in what is seen as a key development in paving the way for sanction relief. Meanwhile, a well-known energy consultancy has claimed that the 70% slump in oil prices which began in 2014 has forced $380 billion of oil and gas projects to be deferred or scrapped.

Technicals: The complex is undergoing another half-hearted rally to the 5-day MA but the downtrend conditions remain firmly in place and as such this price strength is not expected to last. These upside corrections continue to provide good selling opportunities with bears only getting concerned on close above the 8-day MA resistances. Until then, sell rallies to 31.27 WTI; 31.47 Mar’ Brent; 99.96 Heat, 108.87 RBOB and 289.75 Gasoil. Stick with the trend – the latest leg down is looming.

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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.