Daily Oil Commentary

Brent closed up 0.38 to $69.20, WTi closed at $63.57 up 0.61 and Bitcoin closed at $14,902 up $441.

Brent closed up 0.38 to $69.20, WTi closed at $63.57 up 0.61 and Bitcoin closed at $14,902 up $441. I'm sorry but I'm going to start yet another morning with another rant. So, EIA data was published last night and again we saw another draw on crude inventories. First let's forget the fact that the numpties at API were only out by 6.5mn bbls last week. Even though the market STILL reacts to these ridiculously offside numbers and doesn't adjust from them when they come in abysmally wrong is beyond me. Seriously, how do these people get these things so wrong? If they were dentists and you went in for a filling and came out with a pair of breasts you would probably question that that dentist doesn't know what they're doing. Grrr. Anyway moving on - so the EIA showed a draw on crude. Great. 5 weeks of draws and the market sees this as a positive step that the market is rebalancing. Hold on their Nessie. Since December 1st we have seen draws on US crude of approx 34.155mn bbls. Wonderful. BUT since December 1st we have seen product builds (gasoline and distys) of 38.489mn bbls. !!!! Refineries are running at record levels and the crude isn't actually going anywhere! In fact we have seen a net increase on crude and oil products of 4.334 mn bbls! I honestly just don't get it. How can these numbers be ignored? Let's add some other harsh realities that are being awkwardly ignored like when you see an ex girlfriend in a super market you really really don't want to speak to. Es Sider pipeline down - now fixed apparently. Forties pipeline went down - now fixed. US oil production at 10mn bpd and EIA predict it will be at 11mn bbls a day. Yet here we are, flirting with $70 per bbl. I give up. I'm not in tomorrow, I'll probably be in a nut house banging my head against a padded wall about this oil market. I wish you all a good day and a nice weekend.

Daily Oil Commentary

Brent closed up 1.04 last night to $68.82, WTi closed at $62.96 up 1.23 and Bitcoin closed at $14,461 down $484.

Brent closed up 1.04 last night to $68.82, WTi closed at $62.96 up 1.23 and Bitcoin closed at $14,461 down $484. Apart from Bitcoin, which all seems like a bit of a mistake this year, crude is pushing forwards with the same ferocity as a Harvey Weinstein harassment case. I'll admit it - I have many failings, none of which are perilous or against any laws or anything but I do have failings. For e.g., I don't understand why people leave little bits of food in the sink for someone else to wash away. I don't really understand social media - Why tweet someone about what you're having for dinner when they are sitting right in front of you anyway? But most of all, the biggest bug bare I have is this oil market. I just don't understand. Am I missing something? I feel like I must be missing something pretty bloomin' big considering we are about to touch $70 per bbl. Look I know my opinion doesn't matter - nor even does my rationality matter but I read yesterday that US oil production is going to hit 11mn bpd by the end of the year. US oil production in the Lower 48 in 2016 was 8.39mn bpd. End 2018 it is going to be 11mn bpd. That is 2.61mnbpd higher in 2 years or 31%. OPEC/Non OPEC cuts are taking off 1.8mn bpd by the end of 2018. The OPEC production was initially made at the end of 2016. So since that cut was announced by the end of 2018, even if everyone fulfils the cuts the oil market will still be oversupplied by 810,000 barrles per day. Yet we are at 3 year highs. Ummmm - WHAT'S GOING ON!! The 11mn bpd forecast wasn't written by some spotty teenager sitting in a coffee shop either. It was the EIA's actual forecasts. You remember those people right? The same ones who publish weekly data that the market goes cock-a-hoop about? I wonder what Dean the Cabbie would say...Good day.

Daily Oil Commentary

Brent closed last night at $67.78 up 0.16, WTi closed at $61.73 and Bitcoin closed at $14,945 down $1,959.

Brent closed last night at $67.78 up 0.16, WTi closed at $61.73 and Bitcoin closed at $14,945 down $1,959. The relentless bull run continues on crude and we are edging ever closer to $70 per bbl. $70 per bbl. That's high. It's one of those numbers I don't use on my keyboard very often either so it isn't all shiny. What do we reckon? We hit $70 and the mother of all sell offs commences? Probably not, next stop a hondo I think and it doesn't even matter what I say about it, it will probably get there. Anyway moving on, I want to talk about Guam. It's a tiny island in the Pacific that gets a lot of press as it holds a fairly sizeable US Air Force base. But I was reading the morning Guam Gazette, as you do, and a very troubled bloke called Dean was moaning about the price of gasoline. I quote "Crude oil cost is too high," said Dean. "But crude oil is where it's at." Thanks Dean. Couldn’t put it better myself. I hope this bloke meets as much fame as Joe the Plumber did. Dean the Cabbie we shall call him. Why is Dean important though? Well I bet none of you can point your finger to within 500 miles of where Guam actually is but Dean has a point. And Dean my old mucker I will try and ensure everyone hears you. How can it be that Dean the Cabbie, living in a remote island like Guam can say that gasoline prices are too high? Surely with crude oil up here, and I quote Deano here "Crude oil cost is too high" demand will wane? What will happen to people who may look at not getting in their morning taxi with Dean? Will Dean be OK? Will I ever hear from Dean ever again? Dean if you're reading mate, I've got your back. Next time I'm in Guam I'll ensure you pick me up from the airport. Here's to Dean the Cabbie. Good day.

Daily Oil Commentary

Brent closed down 0.45 on Friday to $67.62, WTi closed at $61.44 down 0.57 and Bitcoin closed at $16,904 down $1,738.

Brent closed down 0.45 on Friday to $67.62, WTi closed at $61.44 down 0.57 and Bitcoin closed at $16,904 down $1,738. Before we start the week I would like to make it clear that the FA cup never meant anything to me anyway, not even if Arsenal are the current holders of the cup and the team is full of pretty boys who do nothing except make sure their hair has enough gel, their tattoos are out for all to see and a manager who does nothing except moan to the point where he can't even be in the dig out. See. Told you I don't care....moving on, this oil market. Well at the end of September Brent spent a while in a $55-$60 per bbl range. Then from the end of October to end December it spent it in a range between $60 - $65 per bbl. It seems we are now in a range slap bang in the middle of the $65 - $70 per bbl range so will we follow the same pattern as previously? Let's not forget that the previous 2 ranges we had the OPEC effect after the November meeting. The OPEC effect is like the Trump effect just without massive hair and stupid tweets. I'm reading that people are forecasting $80 per bbl for crude but on the back of what? A falling rig count? Well that doesn't make any sense because US crude oil production is still increasing so surely this evidences that the system is, once again, becoming even more efficient. Is it demand? Well I didn't really see where and how demand was up in the first place but everyone told me it was up so I just nodded along like one of those stupid dogs people put in the back of their cars. But stocks in the world’s biggest fuel oil hub, Singapore, are up 25% year on year. Hmmm, yeah demand really up? Surely if crude oil prices continue to tick up, dragging product prices up with them then we have to see demand eventually coming down no? Or am I missing something? Good day and week to all.

Daily Oil Commentary

Brent closed last night up 0.23 to $68.07, WTi closed at $62.01 up 0.38 and Bitcoin closed at $15,166 up $33.

Brent closed last night up 0.23 to $68.07, WTi closed at $62.01 up 0.38 and Bitcoin closed at $15,166 up $33. One week done in 2018 and what has it bought us? Well if you're Steve Bannon then a one way ticket to Aruba I think but what about the oil market? Well it's certainly a lovely start if you're a producer. Crude is climbing ever closer to $70 per bbl and I wonder when the stupid rumours of crude at three digits will start? Based on the relentless rally it could be as soon as next week. Personally I think crude has got about as much chance of getting to $100 per bbl as I have of being invited on Meghan Markle's hen do but if previous rallies were anything to go by then I might invest in one of those "I'm the bride" sashes. Crude has absolutely zero business being up here. EIA data last night showed a substantial 7.419mn bbl draw but products were up a combined 13.7mn bbls. 13.7mn!! "Don't worry demand is up" he says. Yeah right. OK I know it is cold in the US at the moment but 13.7mn bpd is not down to unforeseen weather shutting ports, refinery utilisation is 96.7%. That's a 12 year high. When is the market going to realise that the US are banging out as much crude and as many products as they possibly can? Never probably. Until OPEC decide to stop the production cuts and then everyone will take their hands off their eyes and say "Wow! Look how much the US are producing!". Bored. I mentioned a few weeks ago that the market will start looking less and less at EIA data as the weekly pivot point for where prices should be heading directionally and I think this has now been evidenced. I would be interested to see the number of trades going through 5 minutes after EIA data is released in December 2017 compared to 2016 though. The new weekly pivot point is going to be the US rig count, with WTi comfortably above $60 who can see it falling? Good weekend to all.

Daily Oil Commentary

Brent closed last night up 1.27 to $67.84, WTi closed at $61.63 up 1.26 and Bitcoin closed at $15,133 up $397.

Brent closed last night up 1.27 to $67.84, WTi closed at $61.63 up 1.26 and Bitcoin closed at $15,133 up $397. Well, 2018 has started positively for crude hasn't it? Since Dec 27 WTi is up nearly 5%. Quite why we rallied last night I don't know - some people are attributing it to "cold weather" in the US. I'm sorry but I don't know too many people who usually try and sunbathe on the Great Lakes this time of year do you? Also the situation in Iran is causing people to get a little flustered, even though it hasn't affected Iranian production so go figure. The market is jumping on any bullish news regardless if there is any logic around it or if it makes sense. One thing though that is interesting is that the front Brent crude spread has rallied around 15c in the last few days and the Singapore fuel oil market has flipped in to contango for the front 2 months. What does this signal? Well if Brent spreads are backwardated meaning the next Brent month swap is cheaper but the end user market in Singapore is higher as that is in contango is it to be a good year for the product trading market? I think a lot of people will certainly be hoping so. It will be interesting to see how this pans out. One other thing that is interesting (I'm in an interesting mood today), is the correlation between the Schlumberger stock price (Schlumberger are the world's largest oil field services provider in case you live under a rock) and the price of WTi. The two are correlated to the tune of about 0.61. So it is clear that oil services company are indeed benefitting from the rise in crude oil prices. Could it be that these guys are the ones buying the paper market to keep not only the oil price but the equity market at yearly record highs? Answers on a post card. Actually don't send me a post card, there's no postal service in Dubai so by the time it arrives WTi will probably be at $30 again...Stats later - whatever they mean anymore. Good day.

Daily Oil Commentary

Brent closed last night at $66.57 down 0.30, WTi closed at $60.37 down 0.05 and Bitcoin closed at $14,736 up $410. 3 days in and how's everyone feeling?

Brent closed last night at $66.57 down 0.30, WTi closed at $60.37 down 0.05 and Bitcoin closed at $14,736 up $410. 3 days in and how's everyone feeling? Thought so. I think the crude oil market isn't too sure about what this year will bring either. I read yesterday that Russia has increased its crude oil production for the 9th year in a row. Last year Russia produced 10.98mn bpd of crude oil. A 30 year high. Compare that to 1999 when Russia produced 6.1mnbpd it is quite a jump. But hang on I hear you cry! Aren't Russia part of the OPEC/Non-OPEC pact? If so why has their production increased? Ah ha my dear Poirot, the plot thickens...You see it was in October 2016 that Russia agreed to cut production, during that month they produced a whopping 11.25mnbpd and they agreed to shave 300kbpd off that number. So even though they have reduced that astronomical number they are still producing more. Clever. I can't really see Russia slowing down production either, why would they? Prices are up so why not cash in. The USA also had a bumper year in terms of crude oil exports - 1.1mn bpd, double that of 2016. So, in essence, 2 of the 3 biggest oil producing countries are ramping up production. Ahhh but don't worry demand is there to pick up the pieces. Is it really? Let's face it, we live in a world where big brother is watching us all the time. Your carbon footprint is recorded more times than your old Nan records Emmerdale Farm so there is no getting away from the fact that hybrid technology will be the way of the future. This reduces demand on fossil fuels and means more of Russia's finest black stuff will not be refined. I am talking about the motor industry here ofc. I know - why don't the OPEC cartel go and see Elon Musk. If he is bringing in technology that could cripple the oil market why not ask him how his batteries get all there power? Just a thought. Good day.

Daily Oil Commentary

Brent closed 2017 at $66.87, WTi closed at $60.42 and Bitcoin closed at $14,326.78. Do you know what my New Year’s resolution is?

Brent closed 2017 at $66.87, WTi closed at $60.42 and Bitcoin closed at $14,326.78. Do you know what my New Year’s resolution is? It's to not make New Year’s resolutions. They are stupid, make people angry as everyone is waiting for you to mess up and ultimately if you can make epic changes to your life why choose to do them at the most depressing time of the year? Grrr. However crude is having no New Year’s blues and has started the New Year with the same fanciful wishing as a fat bloke who has seen a personal trainer for the first time this morning. $70 for Brent is in touching distance and who knows where we go from there? $80? $100?? It is incredible though - I made a point last week about whether the market will retrace after the Forties pipeline is back or when the Es Sider pipe in Libya is repaired. The market jumped significantly after news emerged of these 2 temporary productions shut downs but now that Forties is back and Es Sider is due to come back online soon has flat price weakened? Not a bit of it. We really do seem to be in a bull market and with the market not seemingly happy to readjust after production is back in these 2 areas could that mean that we are in an overbought market? Caution on flat price over the coming week. What else is going on? Well the US rig count closed 2017 up 42% from 2016. Quite a jump. Apparently US production is at 10mn bpd. Let's not forget that in May 2016 the US rig count was at 404, today we are 747. Will the US rig count ever return to the record set in 1981 or over 4,500 wells? Well if flat price continues to rise who knows? Good day, week and year to all.

Daily Oil Commentary

Brent closed last night at $67.02, WTi closed at $59.97 and Bitcoin closed at $15,720.27. Wow.

Brent closed last night at $67.02, WTi closed at $59.97 and Bitcoin closed at $15,720.27. Wow. Did Wall St get the Christmas song mixed up? All I want for Christmas is crude? What a Christmas gift for the bulls with news of a pipeline explosion in Libya. Quite whether this was some technical traders taking advantage of London stuffing their faces with bubble and squeak and leftover Turkey is anyone's guess. I wonder though - what with the Forties pipeline restarting soon, London waddling back in and that the Es Sider pipe that was sabotaged coming back online as soon as mid Jan will the market readjust as quick as it is to spike? Probably not is the answer I think. I still feel it is hope more than facts that are making people think the market balance is tighter than it actually is. But on its merry way it goes and as soon as news of a crude supply disruption breaks the market jumps on it quicker than people who overindulge at Christmas sign up for a January gym membership. quite how US oil production is being happily ignored when it is more than capable of plugging any supply deficits is beyond me but ignorance is bliss seems to be the word of 2017 if you're a crude producer outside of the USA. Expect some volatility in the coming days on fairly thin trading. FIS are here though should you need a lame joke, a shoulder to cry on or, dare I say it, some sharp prices! Good day.  

Daily Oil Commentary

Brent closed 0.76 up last night to $64.56, WTi closed at $58.09 up 0.53 and Bitcoin closed at $16,480 down 1,340.06

Brent closed 0.76 up last night to $64.56, WTi closed at $58.09 up 0.53 and Bitcoin closed at $16,480 down 1,340.06. You'll be devastated to hear but today is the final Christmas cracker joke *sigh* What did Santa do when he went speed dating? He pulled a cracker. Right moving on - seeing as it's the 21st December and everyone is now in full Christmas mode I thought I'd sum up the year so far - Trump. Vegas shooting. MacGregor you legend. Mayweather you legend. Hurricane Irma. Weinstein you absolute reprobate. Solar eclipse meaning that I actually found out what "Corona" really means. Trump. Scaramucci. Hurricane Harvey. MBS. Hefner you legend, RIP. Man City unbeatable. Arsenal definitely beatable. Don't fly United Airlines unless you want a beating. WeloveManchester. Trump. US shale oil. Weinstein, really? Iphone X? Is it X or 10? If so where's Iphone 9? OPEC. Non/OPEC. Will they won't they? Boring. Trump. Prince Harry, you've done well me lad. Beatty can't you read?!!? It's lal la land! Oh wait no it's not. US shale oil. Kate's morning sickness - again. Trump. Spacey? Eejit.  Ashes lost, can't wait for 2019. BITCOINNNNNNN. Trump. US shale oil. US shale oil. US shale oil. I think that sums it up nicely don't you? This just leaves me to say that I wish everyone a very Merry Christmas, thanks to everyone who has supported FIS this year and we look forward to more in 2018. For those who haven't supported, you're all on Santa's naughty list...Seasons greeting's to all and to all a good night.

Daily Oil Commentary

Brent closed last night at $63.80 up 0.39, WTi closed at $57.56 up 0.50 and Bitcoin closed at $17,820.60 down $1,267.33.

Brent closed last night at $63.80 up 0.39, WTi closed at $57.56 up 0.50 and Bitcoin closed at $17,820.60 down $1,267.33. Today's cracker – A bearish trader, a bullish broker and Santa are in a pub having a Christmas pint when they notice a $20 bill on the floor. Who picks it up? Santa of course! The other two don’t exist. Moving on - another Tuesday and another round of fairly pointless APi data. I'm not sure if everyone has been on a bender at APi but it looks like they have forecast exactly what they did last week. For all the clarity APi gives us I don't think anyone particularly cares either. In the good old days when people did view US storage data as the weekly pivot for where prices should go a 5mn bbl draw on crude would be supportive but alas times move on in the same brutal way that a large box of M+M's from the local Shell garage won't cut it as a Christmas present to your wife. The data that prices will react off though will be US oil production. Last week we saw the US rig count drop by 4, so if US production does increase again does this show us all, once again, that the US production system is becoming ever more efficient? It's fairly simple in my eyes - In February 2016, US crude oil futures were at a 12-year low. In May 2016, the oil rig count fell to 316, a 6.5-year low. Since then US crude oil prices have risen 118.1% from their multiyear low. Similarly, the oil rig count has doubled from its multiyear low. Since May 2016, US crude oil production has risen 12%. Therefore, unless you are so full of eggnog that you can't see properly, anyone in the oil business should watch the number of active oil rigs. With the Saudi budget forecasting a 12% increase in oil revenues for next year we can already start the conversation that the market share battle is not going away quickly. Good day.

Daily Oil Commentary

Brent closed up 0.18 last night to $63.41, WTi closed at $57.16 down 0.14 and Bitcoin closed at $19,087.93 up $1,435.87.

Everyone feeling festive and joyous? Thought so. Brent closed up 0.18 last night to $63.41, WTi closed at $57.16 down 0.14 and Bitcoin closed at $19,087.93 up $1,435.87. At least Bitcoin is interesting 'cos the oil market certainly isn't. Today's cracker - How do you ruin Kanye West's Christmas? Criticise his wrapping. Brilliant. Right, not a lot left in 2017 but stick with me whilst I try and continue to talk about why 2018 isn't going to be a good one for the price of crude. Social media. I blame Social media for just about everything that has caused unnecessary issues in the last few years. Don't get me wrong I think Facechat and Instabook are now a part of everyday life, people are literally addicted to them, they bring people closer together and perhaps even reunite old family members. Epic, if you all you do all day is sit there with your face planted on your phone screen BUT they are going to be brutal for the oil market and let me explain. Say ten years ago if someone from Oklahoma wanted to go and meet someone in Houston to discuss some drilling or to talk about the latest Cattle season they would get in their pickup trucks and drive the 900 mile round trip for a face to face meeting with lots of back slapping followed by Texas steak and a few of Miller’s finest. Not anymore. Now they skype. Or Facetime. Or WhatsApp call. I genuinely think that even though social media may bring us all closer together to find out what has happened on X Factor that week, it is going to be crippling for oil demand going forward. Why take 2 days out of your life, fill you truck up 3 times when you hop on a "skypey" and be done with it in 15 minutes? I'm not saying the world shouldn't skype Aunt Beryl once a month and find out how her hip replacement has gone but for the sake of everyone in the oil market please just get in your car and go and see her instead? Just a thought. Good day. Everyone feeling festive and joyous? Thought so. Brent closed up 0.18 last night to $63.41, WTi closed at $57.16 down 0.14 and Bitcoin closed at $19,087.93 up $1,435.87. At least Bitcoin is interesting 'cos the oil market certainly isn't. Today's cracker - How do you ruin Kanye West's Christmas? Criticise his wrapping. Brilliant. Right, not a lot left in 2017 but stick with me whilst I try and continue to talk about why 2018 isn't going to be a good one for the price of crude. Social media. I blame Social media for just about everything that has caused unnecessary issues in the last few years. Don't get me wrong I think Facechat and Instabook are now a part of everyday life, people are literally addicted to them, they bring people closer together and perhaps even reunite old family members. Epic, if you all you do all day is sit there with your face planted on your phone screen BUT they are going to be brutal for the oil market and let me explain. Say ten years ago if someone from Oklahoma wanted to go and meet someone in Houston to discuss some drilling or to talk about the latest Cattle season they would get in their pickup trucks and drive the 900 mile round trip for a face to face meeting with lots of back slapping followed by Texas steak and a few of Miller’s finest. Not anymore. Now they skype. Or Facetime. Or WhatsApp call. I genuinely think that even though social media may bring us all closer together to find out what has happened on X Factor that week, it is going to be crippling for oil demand going forward. Why take 2 days out of your life, fill you truck up 3 times when you hop on a "skypey" and be done with it in 15 minutes? I'm not saying the world shouldn't skype Aunt Beryl once a month and find out how her hip replacement has gone but for the sake of everyone in the oil market please just get in your car and go and see her instead? Just a thought. Good day.

Daily Oil Commentary

Brent closed on Friday down 0.08 to $63.23, WTi closed at $57.30 up 0.26 and Bitcoin closed at $17,647.06 up $1,107.70.

I hope everyone had a nice weekend. Brent closed on Friday down 0.08 to $63.23, WTi closed at $57.30 up 0.26 and Bitcoin closed at $17,647.06 up $1,107.70. Keep your eye on Bitcoin with the CME contract now active...Today's cracker - Why was Theresa May sacked as nativity manager? She couldn’t run a stable government. So one week until Christmas day and the market continues to trade sideways. Much to the joy of OPEC producers, Non-OPEC and US shale producers. It seems like the oil market is in the same world as Peppa Pig and her little mates. Everything seems rosy and nice and everyone is rolling on the floor laughing. But what's on the horizon for oil? Well this is the question. I read an interesting piece yesterday regarding the effect the OPEC/Non OPEC cuts have had: "When the deal was first agreed, we were all told that the three exempt nations, Libya, Iran and Nigeria would have no effect on the deal. To date, their production has increased by 729,000 barrels a day. The US Shale industry was only supposed to be able to start increasing production about now, in the fourth quarter of 2017. Instead, they started in October 2016, and soared 1.33 million barrels since" So OPEC/Non OPEC cuts of 2mn bbls has been wiped out and for once the IEA have actually written that they don't really see demanding picking up the pace they initially anticipated and 2018 will continue to show a surplus. One thing I have to doink my trilby to however is the compliance level OPEC have shown throughout this year - 120%. Amazing really. However can this level be sustained? Will the US continue to increase production even though the rig count dropped by 4 last week? Will I be able to continue to eat the same level of twiglets for the coming week? Stay tuned to find out...Good day and week to all.

Iraq Basrah crude tender on Dec 15, 2017 through Platts MOC

Iraq Basrah crude tender on Dec 15, 2017 through Platts MOC

Iraq's State Oil Marketing Company (SOMO) intends to issue on December 15 an open expression of selling interest for Basrah Light and Basrah Heavy crude oil. The tender will be facilitated by S&P Global Platts' crude oil Market on Close price assessment process, with firm bids for full cargoes to be published as headlines on page 3 of Platts' real-time information service, Platts Global Alert, and through its MOC communication tool, eWindow.

Daily Oil Commentary

Brent closed up 0.54 to $63.31, WTi closed at $57.04 up 0.44 and Bitcoin closed at $16,539.36 up $141.74. What has the week bought us?

Morning all. I met the inventor of baby trampolines last night. Nice fella, a little jumpy though. Brent closed up 0.54 to $63.31, WTi closed at $57.04 up 0.44 and Bitcoin closed at $16,539.36 up $141.74. What has the week bought us? Well it's the morning after just about everyone's Christmas party so I imagine if you're a seller of fried egg sandwiches AND COFFEE then you could be in for a bumper morning but what about the oil market? Well it's all very range bound to be honest. Granted the Brent structure has taken a spike as those Victorian pipelines the Forties system use have cracked. I'm pretty sure that is the tip of the iceberg though but we shall see. Week on week Brent is up 1.8%. I read yesterday that Kuwait see oil demand up 1.5mn bbls next year. Punchy. Then at the bottom of the story I read that Kuwait wants to increase production to 4mn bpd by 2020. They currently produce around 2.8mn bpd. I’m not surprised you see demand picking up based on the fact you’re going to increase production by 40pct mate! It sounds like once we get to the end of the OPEC cut agreement we could very quickly see a flood of bbls back in the market. This I think will be priced in come 2H 18 and down we go before the OPEC cut is then extended again. It sounds like we could have a messy divorce on our hands once the agreement comes to an end but which divorce is ever not messy? What else is going on. Well, the buzz word of the year in the oil market has been refining margins. They have performed better than anyone could have possibly hoped but will they continue to last? I think we really need some tangible evidence of product demand increasing before that band wagon will continue to roll. Have a good weekend and fellas - START YOUR SHOPPING!

Daily Oil Commentary

Brent closed down 0.90 last night to $62.44, WTi closed at $56.60 down 0.54 and Bitcoin closed at $16,397.62 down $900.67.

Brent closed down 0.90 last night to $62.44, WTi closed at $56.60 down 0.54 and Bitcoin closed at $16,397.62 down $900.67. The more eagle eyed among you will notice our new daily price Brentchmark. Mock all you like, we will all be talking Bitcoin in the years to come. Today's cracker - What’s the difference between Ryanair and Santa? Santa flies at least once a year. Well another Wednesday of EIA data which historically would have yielded a rally in flat price but in these modern "MyfaceInstasnap" times, the crude draw was ignored like fudge in a box of Quality Street. Granted that the market did pause after EIA data was announced but I think this was purely down to the fact that every trader had a mouthful of Pret's Roast Turkey and Cranberry sauce sandwich than they did question whether the data was bullish or bearish. If you haven't tried one btw then you must, they are delicious. US production is quietly but surely increasing and you can't say we didn't warn you. It doesn't take one of those blokes who mines bitcoin to work out that with OPEC extending the cuts and WTi nearing $60 that US producers are going to increase production. Production will be at 10mn bbls plus soon and who knows where it will be this time next year. However I don't see this increased US production as ephemeral, quite the opposite. With the extra revenue being generated with higher prices the US producers will invest this income in to making their technology more efficient so they can produce more oil at lower costs. If they put it in the balance sheet and pay it out as dividends then the divs really will be themselves. Good day.