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PVM Midday Report 08 March 2016

Published Tuesday, March 8th, 2016

Headlines

  1. Chinese February crude oil imports surge 27% on the month to a record high of 8 mbpd
  2. Loadings of North Sea crude set to inch higher in April to 2.22 mbpd
  3. Iran Revolutionary Guard defies US sanctions with ballistic missile test
  4. Chinese exports tumble by a quarter in February y-o-y; imports down 14%
  5. Survey of US small business confidence falls in February

Oil                                                                                              

Fundamentals: Chinese crude oil imports have come back strongly in February after a poor showing in January with a 27% monthly increase to a fresh record high of 8 mbpd. These gains were principally driven by a rise in strategic stockpiling as well as the growing appetite of independent refiners which have been taking advantage of strong refining margins. Elsewhere, planned loadings of crude grades from the North Sea are set to hold steady at a four-year high in April at 2.22 mbpd.

Technicals: The contracts are for the large part pausing for breath after yesterday’s solid performance though RBOB has moved over its key resistance at 138.96 and a close above it will have the rest follow through higher. WTI has a target to 39.45 valid whilst above 37.03 while Brent needs a move and close over 40.89 for a leg up to 43.35. Heat and Gasoil both have an objective higher to the 100-day MA at 125.12 and 368.75 respectively. Keep an eye on RBOB at 138.96 – higher numbers should be forthcoming whilst it stays above it. Otherwise be ready for sharp corrective dips as the 5-day MA gap becomes too large. Stick with the new trend – do not be short.

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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.