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PVM Midday Report 22 February 2016

Published Monday, February 22nd, 2016


  1. IEA projects US oil output will reach 14.2 mbpd in 2021; current imbalance to fade in 2017
  2. Head of Libya’s NOC warns of further IS attacks on its oil infrastructure
  3. Speculators increase bets on rising ICE Brent prices by almost 20,000 lots in week to Feb 16
  4. Eurozone private-sector activity growth slows in February – Flash Composite PMI


Fundamentals: In its medium-term outlook, the IEA has forecast that the current oil surplus will begin to fade in 2017 on the back of declining US crude oil output though it sees the latter eventually rebounding to a record high of 14.2 mpbd in 2021. It also predicts that global oil supply will rise by 4.1 mbpd between 2015 and 2021 with demand set to grow by 7.2 mbpd over the same period. Libya’s NOC has warned that it expects IS to carry out further attacks on its oil facilities unless a UN-backed unity government is formed. Meanwhile, speculators have bolstered bets on rising ICE Brent crude prices by 7% or 19,541 lots in the week to February 16 following a 6% bounce in prices over the same period.

Technicals: The contracts are in most cases rallying over the s/t MAs and should go into resistance testing mode. This is likely to be no more than a “springboard” move to resistance with little staying power or resilience. Apr’ WTI is now running into the 34 day MA at 32.92 and needs a m/c over here to a leg up to 34.20 area. Brent is above the s/t MAs and should move a bit higher to 35.30 before running into trouble. Heat is being held back by the 5 day MA around 105.45 and needs to move over here. RBOB could easily run up to 100.05 and Gasoil is being held back by the 5 day MA around 313.75. Be wary of this move higher.

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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.