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PVM Midday Report 29 June 2016

Published Wednesday, June 29th, 2016

Headlines

  1. API reports sixth-consecutive weekly draw in US crude oil stockpiles
  2. Russian Finance Ministry forecast oil prices will stand at $40/bbl by year-end
  3. Regional German inflation data for June points to pick up in consumer price growth
  4. European Commission survey of eurozone economic sentiment slips in June

Oil                                                                                              

Fundamentals: Oil prices are taking their cues from the recovery in risk appetite as well as a report from the API showing a hefty 3.9 million bbl draw in US crude oil stocks which was set against forecasts for a 2.4 million bbl draw. Cushing stocks also fell, this time by 1.2 million bbls, while gasoline and distillate joined the broad decline with respective falls of 416,000 bbls and 830,000 bbls. Meanwhile, Russia’s finance ministry has revealed that it expects oil prices will stand at $40/bbl by the end of the year.

Technicals: The contracts have recovered from the 55 day MA support targets and narrowed the 5 day gap. It’s now make or break at the 5 day MA supports. These are on WTI around 48.05; Sep’ Brent 49.48; Aug’ Heat 148.51; Aug’ RBOB 153.49; and Gasoil 434.50. RBOB’s is key resistance whilst the rest pivotal support. A move over generally should cause a test of the 8 and 13s and these are also serious resistance. A failure to hold over he 5s would cause a re-test of the recent lows. A m/c over the 8 and 13s would mean a springboard to the recent highs. The next leg is entirely in the hands of the s/t MAs – watch them carefully today.

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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.