malcy on oil price10 Feb 2015 13:57
Oil price
The Opec monthly report was out yesterday but too late for the blog, it did however carry enough good news to maintain the positive momentum for the oil price. Within the report there were two major positives, US supply forecasts were trimmed and demand numbers, including the call on Opec crude were raised. US supply growth has halved on the 2014 increase and non-Opec supply of 850/- b/d is down by 420/- b/d. With demand numbers steadying, up 2.17m b/d for this year and weighted towards the 2nd half ( Q1 demand of 91.38m b/d to Q4 of 93.7m b/d) call on Opec crude of 28.02m b/d in the first half rises to 30.37m b/d in the 2nd half. Readers will know that I expect the oil price to be ‘U’ shaped and rise towards the end of the year as a delayed reaction to the rig count falls and slow burn effect of the fall in investment worldwide to make the bounce more pronounced. Whilst the recent rally will be welcomed by the industry there is a long way to go yet.
Chartists however are strutting their stuff at the moment as their support levels are being held and upward resistance being tested. For Brent, support is seen as being at $53.99 and $52.40 while resistance is at $59.15 and after that at $69.23. Brent’s intra-day high yesterday was $59.61 and whilst we are well off that at the moment if it should close above that level then they are in Nirvana…
It is worth remembering amongst all this joy that the Chinese data out overnight was poor, Grexit is looming and the talks about Ukraine hardly encouraging. Last week I had great hopes that average US gasoline prices would fall below the magic $2 per gallon level as we got down to $2.04, i’m afraid that they stalled around there and the price has picked up, albeit helped by the refinery strikes and now stands at $2.19, up 12.3c week on week.
- See more at: http://www.malcysblog.com/#sthash.ISFm1tTv.dpuf
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