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PVM Midday Report 25 February 2016

Published Thursday, February 25th, 2016

Headlines

  1. Oil executive hints that US shale output cannot increase until prices reach $60-$70/bbl
  2. Chinese crude oil stocks down 3.7% at the end of January from the previous month
  3. Final reading  of January eurozone annual inflation trimmed to +0.3%
  4. GSK survey of German consumer morale edges up marginally this month
  5. UK 4Q’15 GDP confirmed at +0.5%; sterling makes first advance in four days

Oil                                                                                              

Fundamentals: Russia’s vocal energy minister has revealed that oil representatives from OPEC and non-OPEC producers are planning to meet in mid-March to formalise the recently agreed oil production freeze and claimed that such a proposal should last for a minimum of one year. Elsewhere, the CEO of one of the largest oil producers in the US shale industry has claimed that output in the sector will not increase until prices climb back above $60/bbl.

Technicals: The contracts are continuing to ebb and flow around the s/t MAs and whilst below testing supports and above battling with resistances. It is stuck in a range and lacks direction. Whilst above the s/t MAs expect the resistances to come under pressure and the rally to fail. Whilst below the s/t MAs expect the support to be tested and hold. Wait for breaks of the extremities for a new or renewal of an old direction.

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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.