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PVM Midday Report 16 February 2016

Published Tuesday, February 16th, 2016

Headlines

  1. Saudi agrees crude oil production freeze at January levels with Russia, Qatar and Venezuela
  2. Iran unlikely to join output freeze until oil production recovers and market share is restored
  3. Azeri oil official claims that it has no plans to take part in the output freeze
  4. ZEW gauge of German consumer morale tumbles on waning global growth prospects

Oil                                                                                              

Fundamentals: This morning has seen the oil ministers from Saudi Arabia, Russia, Qatar and Venezuela agree to a freeze in their crude oil production at January levels. The decision implies that Russian and Saudi oil production will average 10.88 mbpd and 10.09 mbpd respectively in 2016. Talks for Iran and Iraq to join in the output freeze are set to take place tomorrow although an Iranian official has signalled that it would only be open to discussing such a step once it has restored its pre-sanctions market share.

Technicals: The market is highly volatile and dangerous. It is likely to stay that way. The key resistance levels that whilst below the market is deemed merely in a correction state with no change in trend. They are at 32.40 WTI; 35.94 then 36.20 Brent; 112.52 Heat; 115.22 RBOB; and 329.50 Gasoil. Today’s targets to 31.55 WTI; 35.94 Brent; 111.81 Heat; 107.52 RBOB; and 323.00 Gasoil have pretty much been hit. Any change of trend is going to need facts and not fiction – meetings don’t cut it. They scare shorts and encourage short term buying but the market needs a lot more than that to change direction. The long term resistances are dangerous and care near them 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.