PVM Midday Report 13 June 2016
Headlines
OPEC hints at tighter oil balance in 2H 2016; output down 100,000 bpd in May
Chinese implied oil demand falls by 380,000 bpd in May y/y to 10.24 mbpd
Iran’s biggest oil…
Introduction. The contracts performed well yesterday. The relative lack of enthusiasm displayed by RBOB is a worry and needs to be watched. The market had, by Monday, completed a price cycle by dumping down to the 55 day MAs, and a recovery was on the cards. However the rally has done better than most would have predicted and it looks like Friday and Monday’s collapse was a “bear trap”. A recovery to the short term MAs was to be anticipated, but the move and close (m/c) over these resistances, last night, on all but RBOB has provided a differed perspective. Whilst above the s/t MAs the contracts can be expected to re-trace their steps back to the recent highs. Heat has already done this by hitting 154.52. This recovery has also been conducted with the stochastics not only moving positive (on all but RBOB) but with bullish divergence on the crudes, Heat and, to a lesser extent, Gasoil. RBOB’s is still negative. This recovery is likely to have more to go yet, and the key to this will by any dip holding at the s/t MAs and RBOB remaining above its 5 day MA, around 152.21.
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