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PVM Midday Report 31 March 2016

Published Thursday, March 31st, 2016

Headlines

  1. Asian imports of Iranian crude oil hit two-year high of 1.28 mbpd in February
  2. Reuters oil price poll sees Brent and WTI averaging $40.90/bbl and $39.70/bbl in 2016
  3. Eurozone remains in deflation; consumer prices fall by 0.1% y-o-y in March
  4. Standard & Poor’s cuts China’s sovereign-debt outlook to negative
  5. Final reading of 4Q ’15 UK GDP revised to +0.6% from +0.5% previously

Oil                                                                                              

Fundamentals: Iran continues to make headway in the post-sanctions era as evidenced by figures showing that its crude oil exports to Asia rose by 24.6% in February from a year ago to a two-year high of 1.28 mbpd. The biggest increase came from India and South Korea which saw their imports more than double over the period to 215,800 bpd and 244,183 bpd respectively. Meanwhile, the latest Reuters monthly oil price survey sees Brent and WTI averaging $40.90/bbl and $39.70/bbl respectively in what is the first increase in 10 months.

Technicals: The contracts are in trouble and likely to head lower later today. The s/t MAs are lined up above the market as sellable resistance. This morning recovery is logical given the scale of yesterday’s failure but the betting money should not be on this recovery lasting long. Meanwhile there are targets lower on WTI to 37.66, valid whilst below 38.66; May Heat to 116.09 valid whilst below 115.95; May RBOB to 142.83 valid whilst below 147.14; and Gasoil to 343.00 valid whilst below 350.25. Expect volatile conditions.

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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.