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The beginning of the end?

Published Tuesday, February 16th, 2016

Due to President’s Day the US was on holiday yesterday and as a result we experienced a rather lacklustre session in the oil markets. Brent gained 3 cents/bbl and ICE WTI 28 cents/bbl. The ICE settlement prices of the main CME product futures were -5 points on Heating Oil and -139 points on RBOB.

The day’s performance might have been subdued but the same cannot be said about the post-settlement period and this morning’s trading. By the time this report hits your inbox we shall surely have more detailed information about the outcome of the meeting between oil producers in Doha but for the time being this is what we know and can conclude:

  • The Saudi, Russian, Qatari and Venezuelan oil ministers are meeting behind closed doors in Doha.
  • Neither the agenda nor the schedule of the meeting is known however it is obvious the talks will centre on low oil prices.
  • A press conference will follow the talks.
  • The news of the get-together was enough to send shivers down the bears’ spine and as a result Brent is up $2/bbl this morning.
  • Initial stock market reaction is also positive with Russian shares up 2.8%, the Shanghai Composite Index 3.3% above last night’s close and the FTSEurofirst 300 index opening 0.8% higher.
  • It is anyone’s guess what the impact or the consequences of the talks will be but it is obvious that oil prices around $30/bbl are unbearably painful for major oil producers.

As usual the devil is in the detail and we shall comment on these details in tomorrow’s report as they become available.

to read the rest of the report, please click here

Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.