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PVM Midday Report 30 June 2016

Published Thursday, June 30th, 2016

Headlines

  1. Iranian crude oil exports to reach 2.14 mbpd in July, down from 2.31 mbpd in June
  2. Talks aimed at averting Norwegian oil workers’ strike get underway
  3. Goldman warn that normalising Nigerian oil output may push average 2H price below $50
  4. Eurozone edges out of deflation for the first time in five months in June
  5. German retail sales rebound 0.9% in May, ends run of two consecutive months of decline

Oil                                                                                              

Fundamentals: The intensifying battle for oil market share is expected to undermine Iranian crude oil exports next month as Saudi Arabia and Iraq turn up the heat on their neighbouring oil producer. Tehran’s crude loadings to foreign buyers are seen averaging 2.14 mbpd in July which is up 70% from a year ago but down from 2.31 mbpd seen this month. Elsewhere, talks aimed at averting an oil workers’ strike in Norway have begun today and comes as producers warned that industrial action would trigger a 229,000 bpd drop in oil and gas output which is equivalent to 12% of the country’s total production. Meanwhile, Goldman Sachs have cautioned that returning Nigerian crude oil output may push average oil prices for the second half of this year below its current estimate of $50/bbl.

Technicals: The contracts are wavering slightly but with the exception of RBOB – which is holding its pivotal 5 day MA support at 152.26 – are above all the daily s/t MAs and as such the upside potential remains. Target higher are still active whilst Aug’ RBOB holds above its 5-day MA. They are 50.54 WTI; 51.85 Sep’ Brent; 154.52 Aug’ Heat; 155.25 Aug’ RBOB and 455.25 Gasoil. This morning’s dip is to be expected following yesterday’s surge higher but so long as RBOB is above the 152.26 area one can expect the recent highs to be under pressure.

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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.