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PVM Midday Report 14 April 2016

Published Thursday, April 14th, 2016


  1. IEA slightly trims 2016 global oil demand growth to 1.16 mbpd
  2. IEA downplays impact of output freeze deal on current oil market imbalance
  3. Eurozone avoids deflation in March after annual inflation rate revised up to zero
  4. Ifo cuts German 2016 GDP growth forecast to 1.6% from 1.8% previously


Fundamentals: In providing its latest oil supply/demand updates, the IEA has trimmed its 2016 oil demand growth forecast to 1.16 mbpd from last month’s estimate of 1.17 mbpd. It increased its forecasted call on OPEC crude oil for this year by 20,000 bpd to 31.46 mbpd while leaving its projection of non-OPEC supply unchanged at 56.95 mbpd. Moreover, it revealed that OPEC crude oil output eased by 90,000 bpd on the month in March to 32.47 mbpd and expressed doubts as to the impact on the oil imbalance of an agreement at Sunday’s Doha freeze meeting.

Technicals: The contracts failed at the very serious resistance yesterday and followed through in a southerly direction to test the 5 day MA supports on the dip. The pullback has narrowed the 5 day gap at over $1.40 yesterday to nothing today, providing a clear indication of how useful keeping an eye on the 5 day gap is when a market is overcooked. The market has cooled off but must hold the 5 day MAs or it’s going further south. The 5 are on WTI around 41.14; Brent 43.55; Heat 124.51; RBOB 151.18 and Gasoil 369.75. They are all in the proximity of today’s lows and from where the contracts started to rally. Holding the 5s on the first attempt is not a huge achievement. The market is likely to remain very volatile. It’s tonight’s closes that matter.

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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.