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PVM Midday Report 13 April 2016

Published Wednesday, April 13th, 2016

Headlines

  1. Chinese crude oil imports ease in March from February’s record high to 7.68 mbpd
  2. OPEC trims 2016 global oil demand growth estimate by 50,000 bpd; March output up
  3. Reports claim that Iran’s oil minister will not attend Doha freeze meeting
  4. Chinese exports surge by 11.5% y-o-y in March; first increase in nine months
  5. Eurozone industrial production slips by 0.8% in February from January

Oil                                                                                              

Fundamentals: In its latest monthly oil report, OPEC has trimmed its 2016 global oil demand growth forecast by 50,000 bpd to 94.18 mbpd and also trimmed the estimated call on its crude for this year by 60,000 bpd to 31.46 mbpd. It now predictes that global oil stock builds will average 790,000 bpd this year after secondary sources reported a modest 15,000 bpd rise in the cartel’s output last month to 32.25 mbpd. Elsewhere, China’s crude oil imports slipped in March to 7.68 mbpd from February’s record high of 8 mbpd but were still up 13.4% y-o-y in the first quarter of 2016. Turning our attention to this weekend’s Doha meeting, Russia’s energy minister has reiterated his optimism that an agreement will be reached and comes as reports suggest that Iran’s oil minister will not attend the talks though a representative from the Persian Gulf country will be present.

Technicals: The market is giving up a little bit of ground this morning, but given yesterday’s gains this should not come as a big surprise. However, the contracts – less Brent – are at or approaching very dangerous and potent resistance. There are no further targets higher until these resistances are moved and closed over. The resistance on WTI is at 41.90 to 42.49; Heat 128.40; RBOB 153.70 to 154.16; and Gasoil 381.00 and 384.00. Brent would have a target higher to 46.22 but it can’t get there on its own and needs the rest over these resistances. This may be too big an ask today, especially as the 5 day gap is so wide. Tread with care today when anywhere near the resistances.

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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.