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PVM Midday Report 01 June 2016

Published Wednesday, June 1st, 2016

Headlines

  1. Militants attack two oil wells in Nigeria’s Delta region
  2. Crude import quotas for China’s teapot refineries may reach 2 mbpd by year-end
  3. Iraqi crude oil exports from its southern ports dip to 3.2 mbpd in May
  4. Loadings of North Sea Brent crude set to slip to 97,000 bpd in July
  5. OECD warns of Brexit impact, trims 2016 UK growth forecast to 1.7%

 Oil                                                                                              

Fundamentals: Nigerian militants have struck yet again in the country’s oil-producing Delta region after claiming responsibility for attacks on two oil wells operated by a foreign oil major. Ahead of tomorrow’s OPEC meeting where expectations of coordinated action are low, figures have revealed that oil exports from Iraq’s southern ports have slipped to 3.2 mbpd in May from April’s 3.364 mbpd. A Chinese oil official has hinted that plans to issue more crude oil import permits to independent refineries may see their combined quota reach 2 mbpd by the end of the year. Meanwhile, planned July loadings of North Sea Brent crude have fallen to a four-month low of 97,000 bpd.

Technicals: The contracts are looking increasingly vulnerable. RBOB gave the bearish early warning signal and the rest are now following. Although the market may well pick up some over the next few hours the odds are on lower numbers. It’s the closes tonight that matter most. RBOB is the key to the next leg and whilst below 162.15 has a target lower to 157.22, the highest 34 day MA. WTI is now just below the 13 day MA around 48.67, and a move confirmed by a close (m/c) 48.35 would green light a target lower to 46.78. Brent is below the 13 day around 49.61 and whilst below has an objective lower to 48.37. Heat is on the 13 day around 148.25 and a m/c below here green lights an objective lower to 145.30. Gasoil is below the 13 day around 443.00 and whilst below has an objective to 437.00, which it has hit and held. The market is in trouble – watch the supports carefully. They are likely to remain under pressure.

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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.