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PVM Midday Report 15 June 2016

Published Wednesday, June 15th, 2016

Headlines

  1. Goldman Sachs signal that the oil price recovery is at an end
  2. API reports unexpected weekly stock builds across the board
  3. Iranian crude oil exports to South Korea more than double in May y/y to 297,625 bpd
  4. Iraqi Kurds hint at new oil export deal with Baghdad if it receives $1 billion/month
  5. UK jobless rate slips to 11-year low of 5% in the three months to April 2016

Oil                                                                                              

Fundamentals: Goldman Sachs have performed their latest U-turn on oil and have struck a bearish tone after claiming that the oil price recovery has run out of steam. Elsewhere, Iraqi Kurds have revealed that they would be ready to sign a new oil export deal with Iraq’s central government if it can guarantee monthly payments of $1 billion. Meanwhile, Iran continues to make inroads in the global oil exports markets after figures showed that its crude loadings to South Korea surged by 130% in May from the same period a year ago to 297,625 bpd.

Technicals: The market is in trouble. The next leg will be dominated by the action at the 34 day MAs on crude. These are on WTI at 47.58 and Brent 48.89/59. These targets have been hit – on the higher one on Brent – and held. Moves confirmed by closes (m/c) below would green light the next leg down. At the moment the slingshot price cycle lower has been completed and it’s advised to wait for developments and sell rallies. Heat has a target lower to 145.50 whilst below the 21 day at 150.33. RBOB has an objective lower to 147.12 valid whilst below the 200 day at 150.21. Gasoil has an objective lower to 437.00, nearly hit earlier. Close below the 34s on the crudes would be bearish. It is not advised to be long.

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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.