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PVM Midday Report 06 June 2016

Published Monday, June 6th, 2016

Headlines

  1. Iranian crude oil exports to South Korea reached 400,000 bpd in mid-May
  2. Bullish bets on ICE Brent crude climb by 2,809 lots in week to May 31
  3. Ghana’s crude oil output to remain steady this year at around 110,000 bpd
  4. German industrial orders suffer bigger-than-expected 2% m/m fall in April
  5. Sentix gauge of eurozone economic sentiment rises to 2016-year high

Oil                                                                                              

Fundamentals: An Iranian oil official has revealed that crude exports to South Korea touched a post-sanction era high of around 400,000 bpd in mid-May and hinted that they are set to rise to 600,000 bpd in the summer months. Ghana has announced that it expects its crude oil output to remain little changed in 2016 compared to last year at around 110,000 bpd. Elsewhere, financial managers increased ICE Brent crude net speculative length by a lowly 0.74% in the seven days to May 31.

Technicals: The firmer numbers this morning look fragile and it is advised to be careful. Friday’s closes were below the short term (s/t) MAs on all contracts and the daily stochastics are negative. The fact that some of the contracts have moved over a few of the s/t MAs does not indicate very much. Brent is the only one above them all and the rest still have these as initial hurdles. WTI is above the 5 and 13 but below the 8 around 49.17 – important resistance. Brent’s highest s/t MA is around 49.98 and being below here would make it look more fragile. Heat is just over the 5 and 13 but below the 8 at 150.20. RBOB is below them all and support at 161.5 – this is not good and may lead the rest lower. Gasoil is below the 5 and 8 but just above the 13 around 445.25. Be careful – this rally looks vulnerable.

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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.