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PVM Midday Report 20 June 2016

Published Monday, June 20th, 2016

Headlines

  1. Vessel traffic at France’s Fos-Lavera oil port back to normal levels
  2. Iran hints at further oil sales to Japan after crude exports surpass 200,000 bpd in May
  3. Money managers trim bullish bets on ICE Brent crude by 17,333 lots in week to June 14
  4. Eurozone construction output falls by 0.2% on the month in April
  5. Sterling soars 2% against the dollar as Brexit jitters fade

Oil                                                                                              

Fundamentals: Vessel traffic outside France’s largest oil port terminal, Fos-Lavera, has returned to normal levels after a four-week strike ended last week though further disruptions lie ahead with workers planning two one-day strikes later this month. An Iranian oil official has signalled that its crude oil exports to Japan are set to increase in the coming months after they topped 200,000 bpd in May. Meanwhile, speculators have pared back bets on rising ICE Brent crude prices by 17,333 lots in the week to June 14 following a $1.61/bbl decline in the front-month price over the same period.

Technicals: The contracts have followed through higher this morning. Friday’s close over the 5 day MA on all contracts made a slingshot (s/s) move from the 5s to the 8s likely. The 8 and 13 day MAs are now the key resistances to observe carefully. WTI has moved over the 8 around 48.50 and almost made it to the 13 around 49.00. The 13 is now the key resistance and only a move and close over here would point to higher numbers. Brent is similar. It is above the 8 around 49.75 but failed to hold over the 13 around 50.17. Heat is also the same. It is above the 8 around 149.57 but failed to hold over the 13 around 150.60. RBOB is above the 5 around 150.45 and threatening the 8 around 152.96. The 13 is around 155.96. Gasoil is above the 8 around 443.75 and below the 13 around 447.00. The 13s are the key resistance, and on all but RBOB the 8s are the key supports. They will point to the next leg – watch them.

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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.