PVM Midday Report 13 June 2016
Headlines
OPEC hints at tighter oil balance in 2H 2016; output down 100,000 bpd in May
Chinese implied oil demand falls by 380,000 bpd in May y/y to 10.24 mbpd
Iran’s biggest oil…
Headlines
- China grants two teapots combined oil import quotas of 6.4 million tonnes per year
- French union leader warns of additional protests after government talks fail
- Implied probability of Britain voting to remain part of the EU rises to 67% – Betfair
- Creditors release €7.5 billion bailout loan tranche to Greece
Oil
Fundamentals: Oil prices are reversing part of yesterday’s hefty losses with Brent set to snap a six-day losing streak as traders take heart from a softer dollar and increasing optimism surrounding the outcome of next week’s EU referendum. An additional bullish catalyst has come from China which has granted two independent refiners oil import quotas totalling more than 6 million tonnes a year. Meanwhile, the leader of the French union at the heart of the refinery strike has revealed that talks with the government have failed to resolve ongoing disagreements and warned of further disruptions and protests.
Technicals: The scale of the recent losses and the quality of support points to a bit of a (temporary) recovery today. Every contract hit and held targets lower yesterday so expect some short covering. Rallies to the 5 day MA resistances would be sells. In the meantime further losses and targets lower are on hold whilst the 55 day MAs hold on the crudes around 45.99/45.14 WTI; and 47.02/46.73 Brent. Heat would need to close below 142.35, RBOB below 146.43 and Gasoil below 421.50. At the moment these previous targets are all some way below the market, close to yesterday’s lows, and good support.
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