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PVM Midday Report 30 March 2016

Published Wednesday, March 30th, 2016

Headlines

  1. IEA chief claims Iranian crude output will rise by 500,000 bpd within one year of sanction relief
  2. API reports smaller-than-expected US crude build; Cushing stocks draw for second week
  3. Japanese industrial output tumbles by 6.2% in February; sharpest fall since March 2011
  4. Standard & Poor’s trims 2016 eurozone inflation forecast to 0.4% from 1.1% previously
  5. EC survey of economic morale falls in March on rising geopolitical risks

Oil                                                                                              

Fundamentals: The head of the IEA has forecast that Iran will increase its crude oil output from existing fields by 500,000 bpd within a year of the removal of sanctions which took place in January. This is only half that of Tehran’s own projections which stand at 1 mbpd.  Also helping support the complex is the API which reported a less-than-expected build in US crude oil inventories of 2.3 million bbls along with the second straight weekly draw in Cushing stocks.

Technicals: The market is ebbing and flowing after yesterday’s falls. All contracts bar May RBOB are below the short term MAs, and all have negative stochastics with bearish divergence. Currently with market recovering a bit the 5 day MAs are holding the contracts back as initial resistance. The most important contract to watch is RBOB. It has held its 13 day MA around 147.79 and whilst above here may well hold up the other contracts. It is below the 5 and 8 day MAs around 148.76 (5) and 147.79 (8). There is no upside whilst below these. RBOB will give the clues today – watch it carefully.

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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.