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PVM Midday Report 02 June 2016

Published Thursday, June 2nd, 2016

Headlines

  1. Nigerian crude oil output climbs to 1.6 mbpd after hitting 22-year low last month
  2. Indian imports of Iranian crude oil dip in May to 379,000 bpd
  3. Iraqi Kurdistan crude oil exports little changed in May at 513,041 bpd
  4. Iran’s crude oil output capacity will reach 4.8 mbpd in 5 years – Oil Minister
  5. Eurozone producer prices fall by 0.3% m/m in April, misses expectations of +0.1%

 Oil                                                                                               

Fundamentals: Oil prices are struggling for direction as traders await the outcome of OPEC’s bi-annual meeting. No coordinated action on oil output is expected and the cartel is likely to continue its policy of letting market forces determine the price of oil. Elsewhere, Nigeria’s oil minister has revealed that oil output has climbed back to 1.6 mbpd after having fallen to a 22-year low of 1.4 mbpd last month following a spate of militant attacks on its oil facilities. His Iranian counterpart has claimed that his country’s oil output capacity is set to reach 4.8 mbpd in five years and comes as figures showe that Indian imports of Iranian crude fell slightly in May but are predicted to rebound strongly in the coming months. Meanwhile, oil exports from Iraqi Kurdistan averaged 513,041 bpd in May which was little changed on the 512,000 bpd seen in the previous month.

Technicals: The market did well, after completing a price cycle, to recover. However it still looks vulnerable and needs to be treated with care. RBOB has given some very valuable signals recently and is worth watching it carefully. It is hemmed in by the 8 and 13 day MA resistance around 163.49/59, and the 5 day support around 163.09. These are the pivots to observe and moves confirmed by closes above or below will flag the next leg. WTI is similar. It is held back by 5 and 8 day resistance around 49.02/18 and supported by the 13 day around 48.88. Brent is on the lowest MA, the 13 day, around 49.68 and a m/c below here would make lower numbers likely. The 5 day MA is the highest s/t MA around 49.92. Heat is holding just above the highest s/t MA – the 5 – around 150.20. The 8 is support around 150.02 followed by the 13 around 149.13. Gasoil is below the 5 around 499.25 and above the 13 around 444.25. In short watch the s/t MAs and RBOB – they hold the clues.

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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.