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PVM Midday Report 09 June 2016

Published Thursday, June 9th, 2016

Headlines

  1. French workers extend strike action at Fos-Lavera refinery until June 14
  2. Iran mirrors Saudi in raising July Light crude OSP for Asian buyers, cuts for Europe
  3. Russia suspends oil loadings from Black Sea ports ahead of bad weather
  4. Chinese inflation rises 2% y/y in May, misses expectations of +2.3%
  5. German exports stagnate in April, imports fall 0.2%

Oil                                                                                              

Fundamentals: Iran has mirrored two important pricing decisions by the Saudis in which it raised the July OSP of its Light crude grade for Asian buyers by 35cts/bbl while cutting equivalent loadings to European buyers by the same amount. France’s refinery woes continue after workers at the country’s biggest refinery announced that strike action will be extended to June 14. Elsewhere, oil loadings from the Russian ports of Primorsk and Ust-Luga have been halted due to bad weather.

Technicals: The market is dipping back some this morning and cooling down. This is not a surprise given the size of the 5 day gap this morning. This is when the flat price, in this case, moves too fast away from the 5 day MA and creates a wide gap. This morning this gap was around $1.30 on the crudes, which is very difficult to sustain. We’ve now dipped back and the gap has been reduced to a more palatable 70cts or so. The contracts are all, with the exception of RBOB, still well above the 5 day MAs, which are important initial supports on WTI around 50.14; Brent 51.22; Heat 153.16 and July Gasoil around 454.25. RBOB has slid below its s/t MAs and may well head for the 34 day around 153.77. The market is cooling off, not collapsing. It’s ok whilst it remains over the 5 day MAs.

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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.