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PVM Midday Report 11 February 2016

Published Thursday, February 11th, 2016

Headlines

  1. Exports of Iraqi Basra crude set to fall by 7% in March from February to 3.38 mbpd
  2. Iran cuts March OSP of its Light crude to Asian buyers; leaves Heavy grade unchanged
  3. Sweden’s Riksbank in bigger-than-expected interest rate cut to -0.5%
  4. Head of French oil major Total predicts firmer oil prices by the year-end

Oil                                                                                              

Fundamentals: Iran has stepped up its efforts to regain market share among Asia buyers after it cut the March OSP of its Light crude grade by 20cts/bbl compared with February. Moreover, it left its Heavy crude grade OSP to the region unchanged and it now stands at the steepest discount to the equivalent Saudi crude grade since 2008. Meanwhile, crude oil exports from Iraq’s southern terminals are set to fall to 3.38 mbpd in March from a planned 3.63 mbpd in February as a result of a dip in sales of its Basra Heavy grade dip.

Technicals: The contracts remain in trouble and have lost further value bar RBOB which is hovering just below its 5-day MA at 94.70 – a close below would have it and the rest head lower. WTI and Brent have tested their downside target at 26.65 and 30.12 and will need a move and close below to ensure further loss of value. Heat has little support before its key downside objective at 91.76 while March Gasoil has a target lower to 269.75, valid whilst below 290.00. Rallies to the s/t MAs remain sales. Keep an eye on RBOB at 94.70. The trend is down – stick with it.

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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.