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 Tuesday, January 19th, 2016
Headlines
Oil
Fundamentals: Chinese implied oil demand slipped by 1.3% in December from a year earlier to 10.46 mbpd but rose by 2.5% across the year to an average 10.32 mpbd – a 256,000 bpd increase over 2014. However, the outlook for this year looks weaker and comes as one of China’s state-owned oil major CNOOC reduced its targeted oil output levels for 2016. A day after claiming that it would be willing to contribute to an oil output cut to help stabilise markets, Oman has announced a storage project that will boost capacity by 25 million bbls by the end of the decade. Elsewhere, the IEA has left its predictions for 2016 global oil demand growth and the decline in non-OPEC crude supply unchanged at 1.2 mbpd and 600,000 bpd respectively. Its projected call on OPEC crude for this year was cut by 300,000 bpd to 31.7 mbpd and it estimates that the cartel’s output including Indonesia fell by 90,000 bpd to 32.28 mpbd in December.
Technicals: This morning’s correction higher is not a huge surprise. A test of the 5 and 8 day MAs looked likely early this morning, and this is exactly what is happening. The 5s are around 30.30 WTI; 29.72 Brent; 96.49 Heat; 106.00 RBOB; and 280.00 Gasoil. These have been breached on Brent and RBOB which makes a further move higher to the 8s probable. The 8s are around 31.19 WTI; 30.68 Brent; 99.48 Heat; 108.56 RBOB and 287.50 Gasoil. Rallies to the 8s are sales. The targets lower are valid whilst below the 8s. These objectives are to 26.65 WTI; 25.05 Brent; 81.15 Heat; and 245.50 Gasoil. The trend is down but experiencing a rally. It is not expected to last.
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