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PVM Midday Report 06 July 2016

Published Wednesday, July 6th, 2016

Headlines

  1. Norwegian oil service workers fail to agree wage deal with employers
  2. Brazilian oil and gas output climbs above 3 million boepd in May
  3. German factory orders unchanged in May, dashes hopes of a 1% m/m increase
  4. Sweden’s central bank postpones future rate hikes amid Brexit uncertainty

Oil                                                                                              

Fundamentals: The “bear fest” continues and oil is taking its cues from the global rout in risk assets as economic concerns dampen oil demand growth prospects. The rising threat of strike action following the breakdown of wage talks between Norwegian oil service workers and the employers is failing to provide any bullish impetus. Similarly, a Reuters poll pointing to a seventh consecutive weekly drawdown in US commercial oil stocks is having a muted impact on sentiment. Elsewhere, Brazil’s oil and gas production rose by almost 8% on the month in May to 3.12 million boepd.

Technicals: Targets lower are being hit on WTI to 45.83 (nearly hit with a low at 45.96); Brent to 47.30 (hit); Heat 144.08 (hit); RBOB 139.79 (hit); and Gasoil to 418.75 (hit). Moves confirmed by closes below would green light further objectives lower to 44.62 WTI; 48.82 then 45.60 Brent; 143.42 then 141.25 Heat; 134.84 RBOB; and 410.00 Gasoil. The daily and weekly stochastics are negative. The market is shaping to go lower. It is not advised to be long.

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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.