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Where am I? bullet

Daily Oil Commentary by Matt Stanley


03/04/2017
By:Matt Stanley

Morning all and hope everyone had a nice weekend. Brent closed Friday at $53.50 and WTi closed at $50.60. Sophocles once famously said "How terrible is wisdom when it brings no profit to the man that's wise".  Now, i'm no expert on Greek tragedies and I'm not an expert on forecasting (that much has been proven recently) but I don't think there is a better sentence to sum up this market right now. I suppose you can change the last 4 words to "...the man that has size" because in this choppy market I think that is the only path to profit right now. Granted, the market has bounced fairly significantly since we hit the dreaded $50.02 last week, this was based on a culmination of things that I'm sure you can all guess, Libya force majeure, product draws in the US and muting’s of OPEC extending the cut.  However all 3 "bullish items" were always on the cards. Libya production increases were never really factored in to any bearish movements so I'm going to dismiss that, product draws in the US are seasonal with gasoline spec changes looming and seasonal refinery maintenance so again I'm going to dismiss that and OPEC were always going to extend the cut the minute prices started inevitably falling back to the $50 level. Guess what? Dismissed. However, I do think we have reached the bottom of the market, I think $50 held on strong enough for me to think that support will continue to fight the bears. I'm still not convinced however that the market is close to rebalancing, I don't see enough evidence of demand increasing to get carried away with anything in that regard but if things carry on the way they are then perhaps, and it's a perhaps the size of "Will Arsenal finish in the top 4" we will see the term "glut" not being used end Q3-17. Good day.

 

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Last Update: 03/04/2017

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