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PVM Midday Report 22 January 2016

Published Friday, January 22nd, 2016

Headlines

  1. Iran set to restart crude oil exports to Europe as soon as February
  2. Credit rating agency Moody’s puts 120 oil and gas companies on downgrade review
  3. Exports of Nigeria’s Bonny Light crude expected to rise in March to 216,000 bpd
  4. Flash Eurozone Composite PMI eases to 53.5 from 54.3 in December

Oil                                                                                              

Fundamentals: Reports are claiming that Iran is preparing to resume crude oil exports to Europe as soon as February and comes as the Greek energy minister confirmed that it has discussed restarting oil purchases with the OPEC member. Credit rating agency Moody’s has put 120 oil and gas companies on review for a potential downgrade in response to increased expectations of financial strain as a result of subdued energy prices. This follows shortly on from its latest downward revision to its oil price forecasts in which it now sees Brent and WTI averaging $33/bbl in 2016. Meanwhile, exports of Nigerian Bonny Light crude are set to increase in March to 216,000 bpd from the 166,000 bpd planned in February.

Technicals: The contracts have moved into an explosive corrective phase. This has taken all contracts above the 8 day MAs and looking to test the higher 13s. Brent has moved over the 13 around 30.85 and a close above would suggest more of a correction higher yet. The 13s are around 32.12 WTI; 98.78 Heat; 109.12 RBOB; and 286.75 Gasoil. These MAs are the real test of the contracts’ corrective ability. Failure to close over tonight would leave them vulnerable. Closes below the 8s would be bearish and point to lower numbers.

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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.