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PVM Midday Report 21 June 2016

Published Tuesday, June 21st, 2016

Headlines

  1. Nigerian militant group behind recent spate of oil attacks agrees to one-month ceasefire
  2. Crude oil exports from Iraq’s southern ports so far down this month to 3.144 mbpd
  3. Chinese imports of Russian crude oil reach record high of 1.24 mbpd in May
  4. Gauge of German investor confidence rises in June as Brexit fears ease

Oil                                                                                              

Fundamentals: Russia has pipped Saudi Arabia to the position as the top crude oil supplier to China for the third month in row in May as exports reached a record high of 1.24 mbpd. This was almost 300,000 bpd more than second-place supplier Saudi Arabia which saw its crude oil exports to China rise to 961,000 bpd over the same period. Crude exports from Iraq’s southern oil ports have eased this month having so far averaged 3.144 mbpd which is down slightly on the 3.2 mbpd seen in May. Meanwhile, Nigerian oil outages, which have been an important source of price support in recent weeks, are set for a temporary lull after the government agreed a one-month ceasefire with militants groups based in the oil-producing Niger Delta.

Technicals: The contracts did well yesterday and the last two days’ price action is a pretty hard act to follow. A cooling off period beckons. The key now is how RBOB performs at the 34 day MAs resistances – closed over last night, but moved below this morning. These two key pivots are at 157.75 and 158.11. They need to be moved and closed over again before there is any further upside potential. In addition the contracts need to all be over the 13 day MAs on Aug’ WTI around 49.61; Brent 50.23; Heat 150.85; RBOB 155.87 and Gasoil 447.25. The price action is around them at time of writing. Use these as support pivots and RBOB’s 34s as the key to the next leg higher.

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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.