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PVM Midday Report 29 January 2016

Published Friday, January 29th, 2016

Headlines

  1. Iranian crude oil exports forecast to top 1.5 mbpd this month; steady at 1.44 mbpd in Feb
  2. Russian Deputy PM claims it will not intervene to balance the oil market
  3. OPEC delegates reveal no date has been set for anticipated OPEC/non-OPEC meeting
  4. Eurozone annual inflation rate strengthens marginally to +0.4% in January

Oil                                                                                              

Fundamentals: Loading schedules have revealed that Iranian crude oil exports are set to hit a two-year high this month of 1.5 mbpd and are predicted to remain largely unchanged at 1.44 mbpd in February. However, progress on restarting Iranian crude oil sales to European buyers has stalled due to ongoing issues in securing shipping insurance. In an update to the prospect of an OPEC/Russia oil output cut, the Russian Deputy PM has signalled that the state will not act to balance the oil markets. Moreover, OPEC delegates have revealed that no date has been set for the widely-expected meeting but hinted that it could take place next month or in early March.

Technicals: The contracts are struggling for direction and more work is needed for the bullish outlook to become conclusive. The crudes have made tentative gains but need to move and close above 34.96 on WTI (c/p) and 35.94/36.20 on Apr’ Brent to ensure bulls head into the weekend on a high. Mar’ Heat has strong resistance at 112.52 while Mar’ RBOB will need to mount a convincing test of its upside target at 114.80. Gasoil has important resistance at 312.25/75, a close over which would have it test its 34-day MA at 314.75. The aforementioned resistances will need to be cracked before the developing bullish sentiment becomes 100% convincing. Until then, caution is advised.

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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.