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PVM Midday Report 22 June 2016

Published Wednesday, June 22nd, 2016

Headlines

  1. API reports bigger-than-expected 5.2 million bbl fall in US crude inventories
  2. Vitol chief sees oil prices rising to mid-50s by year-end
  3. China exports first cargo of Australian-spec diesel
  4. Survey reveals two-thirds of large German companies not concerned with Brexit risks

Oil                                                                                              

Fundamentals: Oil prices are on the front foot with support mainly coming from the API after they reported a hefty 5.2 million bbl fall in US crude oil stocks. This compares to expectations for a smaller drop of 1.7 million bbls. Cushing inventories were also down, this time by 1.3 million bbls, while both gasoline and distillates also registered bigger-than-expected falls of 1.5 and 1.7 million bbls respectively. Elsewhere, China has revealed that it exported its first cargo of Australian-specification diesel earlier this month and comes on the heels of figures showing that total diesel exports rose by more than 300% y-o-y in May to 1.48 million tonnes. Meanwhile, the chief executive of Vitol has signalled that he sees oil prices reaching mid-50s by the end of the year.

Technicals: The complex is making a modest advance and the contracts looks healthy whilst above the 13-day MA and the 34-day MAs on RBOB. Closes below these important supports will take the bullish edge off the energy complex but while above they have upside targets to 50.59 WTI; 50.96 Brent; 152.98 Heat; 162.15 RBOB and 455.25 Gasoil. The bullish outlook is confirmed by the positive daily slow stochastics.

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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.