PVM Midday Report 13 June 2016
Headlines
OPEC hints at tighter oil balance in 2H 2016; output down 100,000 bpd in May
Chinese implied oil demand falls by 380,000 bpd in May y/y to 10.24 mbpd
Iran’s biggest oil…
Published Monday, January 18th, 2016
Headlines
Oil
Fundamentals: In its latest monthly report, OPEC has forecast that non-OPEC crude supply will fall by a bigger-than-expected 660,000 bpd this year as low oil prices take their toll on high cost producers. The oil cartel slightly raised its estimate for global oil demand growth in 2016 to 1.26 mbpd while secondary sources have reported that the group’s output fell by 210,000 bpd in December to 32.18 mbpd. Oman’s oil minister has revealed that it is prepared to cut oil output by 5-10% in order to help stabilise oil markets and comes as an Iranian oil official confirms that the order has been issued to boost crude output by 500,000 bpd following this weekend’s sanctions relief. Meanwhile, speculators have increased bets on rising ICE Brent prices in the week to 12 January by more than 9% despite a more than 15% slump in price over the same period.
Technicals: The trend is down. There are target lower on WTI 26.65; Brent to 25.05; Heat to 81.15; and Gasoil to 245.50. RBOB does not have an objective lower. It hit the target to 102.31 on Friday. Moves confirmed by closes below these targets levels would green light the next set of intermediate objectives to 16.70; Brent to 16.65; Heat to 49.30; and Gasoil to 145.00. The support is not strong and there is no reason other than things look cheap to think that the market is turning. It’s looked cheap before and the bulls have limped off the stage. The key technical indicators are negative. It is not advised to be long. Sell rallies to the 5 and 8 day MAs. Stick with the trend.
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