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PVM Midday Report 10 June 2016

Published Friday, June 10th, 2016

Headlines

  1. Striking French refinery workers have no plans to suspend industrial action – union
  2. Global refinery capacity set to hit record high of 101.8 mbpd in August
  3. Indian demand for fuel jumps 6.7% in May y/y to 16.57 million tonnes
  4. Nigeria confirms latest attack on Obi Brass crude pipeline
  5. German annual inflation rate in May confirmed at zero

Oil                                                                                              

Fundamentals: Oil prices are extending their latest slide as a firmer dollar counters news of a Nigerian pipeline attack in the early hours of this morning and figures showing a healthy increase in Indian fuel demand. Elsewhere, data provided by Reuters has revealed that global crude refining capacity will reach a record high of 101.8 mbpd in August and should underpin strong crude oil demand but also add to the existing flood of oil products in Asia.

Technicals: The contracts are struggling and have – with the exception of RBOB – dipped below their 5-day MAs. Upside targets have been put on hold while below the 5s and the 13-day MAs must now hold by the close or the technical picture will turn bearish with further price weakness on the cards. They are 49.58 WTI; 50.60 Brent; 151.65 Heat and 450.75 July Gasoil. RBOB is below its 13 but holding the 5 and 34-day at 160.46/159.27. A close below the latter would have the whole complex heading lower. Watch the 34-day MA on RBOB and the 13s on the rest.

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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.