Daily Oil Commentary

Morning all and I hope everyone had a good weekend. Brent is trading this morning up 0.74 at $88.64 and WTi is trading at $85.81 up 0.67. Welcome to the last Monday of January. There you go, that should cheer you up because is it just me or does the month of January just absolutely suck? If we go back to this day in 2020 then the world was starting to take more interest in stories emanating from China about a "mysterious Coronavirus-related pneumonia". Largely, the news was read and acknowledged, but largely, dare I say it? dismissed? Nobody, and I mean nobody had it in their thoughts what was to come. Yes, so that was January 2020. Then January 2021 - everyone more or less went back into lockdown owing to Covid. Here we are, January 2022 and whilst Covid is, supposedly, in the rear-view mirror, the world is facing Geopolitical risks it hasn't faced for quite some time. I ask you this though - have these issues been there all along but Covid has thrown a blanket over "other stories"? I would argue yes, apart from the escalating Russia/ Ukraine situation. Oil markets though? They seem to be pricing in supply disruptions and once again $100 oil is back on the cards. Now, I'm not going to comment here about why tensions are higher in Eastern Europe and The Middle East but looking at other markets and January has been nothing short of miserable. It boils down to what The Fed do on Thursday, and it seems like an interest rate hike at some point during Q1, confirming the end to monetary stimulus is now upon us. The box of Roses has been taken away and all that's left is fudge. We're in a fudge market. No market has felt the brunt of this than your mate sitting in his undies in Mum's basement buying up Crypto. Now, one could argue that the crypto bubble has popped, and it has soaked everyone underneath it. Bloomberg reported that the latest crash erased more than $1 trillion in crypto market value. 1 trillion! I only thought numbers like that were reserved for the most excitable child playing Hide and Seek. "I'll count to a trillion!!". But this is real, real investors and real money. The arguments to the upside are that "…financial markets across the globe are under tremendous pressure due to growing inflation and the strict monetary policies of powerful nations like the US." These issues were always there but are now finally being acknowledged. Will oil follow? Ah, now this my friends is the question, but for the time being, geopolitics will offer support to a supposed "tight market". Hmmmmm. Good day, and week to all.  

Daily Oil Commentary

Morning all and I hope everyone had a nice weekend. Brent is trading this morning at $86.33, obviously, up 0.27 and WTi is trading up 0.44 at $84.26, obviously. Today is Blue Monday, or as the internet tells me "… is the name given to a day in January (typically the third Monday of the month) to be the most depressing day of the year". Well, you can do one Blue Monday! Because I'm an oil bull and I'm nothing but happpppyyy. Vrrroooom, look at me Mum! I can fly!!!! I'm an oil bull and I'm happyyyyyyyy, oooh look! Skittles, nom nom nom, buy some moreeee oilllllll! vrrrooooom, see ya blue monday wouldd't wanna be yaaaaa. Or something like that at least. I said last week that even though the market is ignoring all the headwinds it is currently faced with and that in my opinion oil is overvalued right now, that it will, most likely, hit $90 by the end of this week.  Judging by how things are looking so far today, I wouldn't be surprised if oil hit $90 by Wednesday and then, dare I say it? $100 by the end of January? I don't agree with it, I can't justify it, but when you have a runaway train the size of Texas, then pretty much nothing is going to stop this bull run the oil market finds itself in. This morning Brent hit $86.71, outdoing the recent high of $86.70 we saw at the end of October. Any higher than that and you have to go back to October 2018 when we hit $86.74 and before that? Hang on, let me just blow the dust off my "The Oil Album 2014", ahh yes October 2014, that's when oil was last higher. Eight years ago. Is demand back to pre pandemic peaks? Afraid not. It's all about the continued "supply crunch" but apparently with the OPEC+ agreement flattening out this isn't an issue either. Chinese GDP came in this morning at 8.1%, slightly above forecast, markets liked that, but dismissed warnings from several economists that China's economy faces multiple headwinds in 2022 with the property downturn the biggest one. Ignore that. Let's see what the week brings and how much longer the market can continue to keep the blinkers on. Good day, and week to all.

Daily Oil Commentary

Morning all. I'll keep today fairly brief because if I don't I fear I am in danger of very quickly being tagged as a grumpy old man, me? never! Brent is trading this morning at $83.64 down 0.08 and WTi is trading up 0.03 at $81.25. We're 12 days into the new year and so far, the theme of 2022 is one of absolute expectation that everything is fineeeeee. Yesterday was quite extraordinary in the oil market and we ended closing up 2.64 per bbl on Brent and WTi fared even better up 2.80 on the day to close at $81.22, smashing its way through the crucial $80 level like a glass elevator designed by Willy Wonka. Why such an impressive rally though? Ahhhh, now you see this is the thing. Hope. That was it. Expectation that there's not enough oil and demand is looking beaut. Forget Omicron doesn't matter. Forget Kazakhstan issued resolved and Libya production coming back. Forget interest rate rises, actually they are a good thing. Forget that gasoline stocks in the USA rose another 10 million barrels last week, and distillates by another 4 million (gasoline inventories have risen by an apparent 20 million barrels so far in 2022). Forget that the World Bank yesterday warned "global economy faces a "grim outlook" and that they predict global growth will slow to 4.1% from 5.5% in 2021. Yeah, nah, yeah forget all that. Doesn't matter. Just buy it ok? Look, I'm all for higher prices balancing fiscal budgets, of course I am, but can anyone show me some demand data over the last few weeks that justifies oil prices edging closer and closer to $100 per barrel. Actually, don't show me, I'll wait for them to come to me. Let’s start with stats later, shall we? Oh, go on then. Good day to all.

Daily Oil Commentary

Morning all. Brent is trading this morning at $81.28 up 0.41 and WTi is trading up 0.51 at $78.74. Amazing. That's how I can describe this market. Jamie Dimon agrees too, not that Jamie and I have had a chat about it you understand, but he was quoted last night as follows "We’re going to have the best growth we’ve ever had this year; I think since maybe sometime after the Great Depression,”. Amazing. I just want to point out that Mr Dimon was speaking from his 356-bedroom house in the Hampton's, probably, because let's not forget that we are still in the middle of a pandemic. And this is the thing, we have bullish traders, who are working from home, dishing up far too many biscuits to their children (because they are learning from home) before they go on a Zoom call (because that means you may get twenty minutes of silence "the zoom biscuit cupboard" as we now call it) and ignoring that the world is a different to place to live and work in, but a much better one to invest in, apparently. The same can be said for oil markets. Brent has continued its climb above $80 per barrel even with the reasons that pushed it there in the first place largely resolved, i.e., unrest in Kazakhstan and supply issues in Libya. I don't want to sound like a last in the series episode of a US sitcom but allow me to quote from last week’s commentary "The bulls sieve through stories and only keep back only the ones that support their own narrative. I wonder though, if Libya and Nigeria bring back production next month, which they probably will, does Brent reflect this and drops accordingly?". Well, not a bit of it. The support this morning is supposedly down to a general "risk on appetite". This despite headwinds the market is seemingly faced with but so content to supposedly dismiss. Does Omicron even come in the thinking of a bullish trader anymore? I'm thinking, nah, not at all. Even if cases in the US reached over 1 million yesterday. Even if cases in India have increased 400pct since New Year's day meaning home quarantine for all arriving in to the country. Even if people are back working from home and children learning from home. I could go on, but I won't. Expectation is certainly outstripping reality at the moment, but when has it ever not? Sooner or later though, the punch bowl will run dry, until then my oily friends, creep ever closer to $90 because, well, why not? Good day, and week to all.

Daily Oil Commentary

Morning all, and welcome to the first Friday of 2022. And it is 2022, not 2023, ahem. Brent is trading this morning up 0.69 at $82.68 and WTi is trading at $80.19 up 0.73. As the UAE adjusts to a new Monday - Friday working week the oil market readjusts to $80 oil again. It's quite incredible actually, since the 1st of December 2021 Brent has rallied from a low of $68.87 to trading at $82.68 this morning. That's a 20pct rise in five weeks. What are the reasons for this rally I hear you cry? Well, in essence, (and there is no part of me that wants to join the ouching like hell team here, sounds like a brutal place) the same fears are still there that caused flat price to drop to below $70 that were there after the Thanksgiving weekend. In fact, one could argue that there is more oil back to the market (more on that in but a moment), US oil product stocks rose by the most since April 2020, the "gas crisis" is being sorted out in the EU with an armada of LNG carriers arriving in January, and of course, Omicron. What is there on the dark side, sorry I mean, the other side - well, one could argue purely arguments of convenience. Yes, certain OPEC+ members are struggling to produce their increased quotas, Nigeria and Libya mainly. Unrest in Kazakhstan is the current main contributor to bullish sentiment and whilst details are sketchy in regard to supply disruption it seems that the 1.6 million bbl per day pipeline is flowing freely. OK, these two I supposeeeee (roll eyes emoji) are somewhat supportive for supply tightness in the short term, hence why Brent structure has gone bid and why flat price is back to pre ouchy times, but, BUT Nigeria oil production has never been something the market has viewed as consistent, indeed in September 2021 did the Forcados field pump back 200kbpd once Force Majeure was lifted. Libya? Well seeing as they were exempted from the historic cuts in March 2020 and the country has been fighting civil unrest for the best part of a decade it makes no sense to me that the bulls view production hiccups as "bullish". The UAE and Saudi had no issues in increasing production by the allowable amount and Saudi Arabia and the UAE will always be the swing producers in my view so any talk of "tightness" I am somewhat dismissing. The oil market, however, is not. The bulls sieve through stories and only keep back only the ones that support their own narrative. I wonder though, if Libya and Nigeria bring back production next month, which they probably will, does Brent reflect this and drops accordingly? Of course, it doesn't, because that would make sense, and that is not acceptable it seems. Have a great weekend.

Daily Oil Commentary

Morning all. A cathartic day yesterday with both Romelu and I apologising, with that out of the way shall we talk about oil? Brent is trading this morning up 0.10 at $80.10 and WTi is trading up 0.08 at $77.07. It’s funny you know, not funny haha, more funny like when you see someone walk in to a window they thought was a door, that ha! ouchhh funny. I thought to myself this morning - Do I speak about Omicron? I mention it daily, yet I am fearful that if I keep on mentioning it when the vast majority of others are dismissing it that eventually people will switch off (other oil commentaries are NOT available just FYI, thanks). But I was reading the headlines this morning with a morning brew, and I could do nothing but read COVID headlines. I tried to read other news stories but, in the end, it was like trying to watch the TV whilst a gospel choir stands in front of you and sings Amazing Grace. Impossible. So, I'm reading these headlines and then I read that OPEC+ have decided that Omicron poses no risk to oil demand, that the supply/demand balance is better than it looked and that more oil coming back is a good thing. The market loves it though, not that headline, not that one, or that, not you, get out, ahhhh OPEC, there you are, I'll read that one, and up we go. Brent has firmly shrugged off the Thanksgiving blues and we have risen above $80 again from a low of $68.14 only five weeks ago. Hmm, make of it all what you will but all eyes over the next couple of days will shift to those official selling price released by Saudi Aramco and ADNOC. Many are forecasting a sizeable cut to OSPs on the back of weaker Middle East crude structure but again, what am I talking about? realities? Fundamentals? Haha more fool you Mulligatawny Matt, these things matter not. Nor does an increase in product stocks of apparently 11million barrels even with a sizeable draw on crude. Omicron? Nope, ignore that, doesn’t matter as well. Tis but a scratch! Maybe I should get my black knight’s outfit out? I don’t have one of those but it's been a while since I have inserted the caveat here and I am in no way sensationalising the potential Omicron impact, far from it, but all of us know someone who is currently feeling the effects, whether that be a direct case, a close contact or schools being shut, how then it can be dismissed as nothing is what I don't understand. Let's see what happens. Stats later. Good day.

Daily Oil Commentary

Morning all. Brent is trading this morning at $80.17 down 0.63 and WTi is trading at $77.19 down 0.66. I know it doesn't take much, but we're six days into the new year and I'm already confused. I mentioned last year about negative news being good news. But now I'm not sure if positive news is negative, is ACTUALLY positive news. Allow me to explain. Equity markets fell off somewhat off a cliff last night as the Fed released their December minutes which signalled the central bank may raise interest rates sooner rather than later on the back of a "very-tight" job market and unabated inflation. OK, so let's break this down. If Friday's USA Nonfarm Payrolls come in positive then instead of this being a good thing for markets it is actually bad, as it backs up the Fed's concerns and the end of free money is in sight and your mate in his Mum's basement buying Bitcoin and Popeye's chicken sandwiches is quickly sent off to the local Starbucks to earn his keep. Soo, a positive thing is a negative. Certainly, for basement boy anyway. Then we had EIA data, which showed a draw of 2.1 million barrels on crude stocks last week, but a huge build of 10 million barrels on gasoline inventories and 4.4 on distillates. This over the Christmas period. Chris Rea would be fuming - nobody drove home for Christmas. Walking home for Christmas. Not quite the same. Anywayy, you would think that this gargantuan build on products, over a period where demand should be good would be translated by the market as a bad thing and down we go. Not a bit of it my oily friends! We went down, a bit, then everyone went "yeah but but but look! crude stocks drew!" and up we went. It was at this moment I decided Dry January was not for me. So, a negative, was a positive. Hence, where we are now, or where I am at least, confused. This morning makes a bit more sense, oil is following overnight tumbles on equities, and this morning we were at a low of $79.61 on Brent before the bulls decided that would cling on to $80 like how Jack Spratt clings on to a lamp post when it's windy. The issue is though, and it's a convenient excuse the bulls will use - is Omicron. If demand falters on the back of ever rising cases of Covid then it may just mean the Fed defer those interest rate increases. They are coming, but it may just be kicked a little further down the road, and the bulls will happily take that all day long. Good day.

Daily Oil Commentary

Morning all. Brent is trading this morning at $79.01 up 0.03 and WTi is trading up 0.02 at $76.02. First of all, an apology, and no, it's not for those timeless Christmas cracker jokes you all enjoyed so much over the month of December, ok? No, this apology is for missing out the year 2022 in my commentary yesterday. The more eagle eyed of you kindly spotted that I mentioned not once, not twice but three times about the year being 2023. Now, whilst this was of course embarrassing it got me thinking, why didn't I spot that? You might find this odd, but I do actually proofread my commentary, and yet I didn't pick it up. Is that where we are? Am I the opposite of Punxsutawney Phil and am happy for time to skip a year? Mulligatawny Matt, we shall call me. Or is this the situation we are in where last year we more or less did a full circle? Lockdowns, open up, cases drop, travel, cases rise, travel nigh on ceases, lockdowns. Anyway, apologies for that, it's always a good start to the year to have to make an apology, isn't it? Honestly, I feel Romelu Lukaku. Right, oil? Or time travel? Let's talk oil time travel, why not? This time last year OPEC+ met. Prices were set at $50 and there were calls from various members to open up the taps. OPEC+ met, they allowed Russia and Kazakhstan to produce more but these cuts were offset with a surprise call from Saudi Arabia, who voluntarily agreed to cut production by 1mn bpd. This really set the ball rolling and the oil market rally begun. Has it stopped a year later? Not a bit of it. OPEC+ meet today and it is 90pct priced in that production will return as planned, so another 400kbpd. This is good news, apparently, so why not buy oil? Why not? More oil? Yeah, go on fill your boots lads and ladettes. In fact, fill your boots with oil and then buy some more, because it's going to $80. Will there be another caveat from Saudi Arabia volunteering to cut production? Me thinks no, I would say that Prince Abdulaziz has warned the market enough from ouching like hell that there is no need for tangible interference from the de facto OPEC+ leader. Let's not forget though that US oil production is 900,000 barrels per day higher than this time last year and current production is back to levels not seen since May 2020. This may be the real discussion point the group focus on because it's certainly not Omicron. Covid? What's that? Hmmm. Good day to all.

Daily Oil Commentary

Morning all and welcome to 2023, I hope everyone had a very enjoyable break and I wish all of you health, wealth and happiness for 2022. Brent is trading this morning at $78.37 up 0.59 and WTi is trading up 0.58 at $75.79. Right, where to start? A New Year's resolution? No thanks, tried about 150 of them, none of them have worked or lasted January for that matter. In fact, I would argue that January is quite the worst month to abstain from a little bit of what you fancy, do it later in the year, kick that can down the road, why not? The oil market is, and I shall jolly well follow it. I mean, maybe I won't eat half my body weight in stilton round a table full crammed with Terry's chocolate oranges and Rolo's BUT everything in moderation and all that, just like the oil bulls. The UK are actually not working today, they decided to take a day off today so they can all watch the World Dart's final but tomorrow, once the cobwebs are fully in place and waking up to the first days of 2023 what will dominate the headlines? It won't be crises at Bernard Matthew's Turkey Farm, that's done, or overdone I should say. Nor will it be panic at the shops for the latest toy with supply crunch issues. And it won't be will I be able to visit my local watering hole whilst the sprouts are boiling. All of those are now a pleasant memory and what is left in its place are, sadly, nothing but COVID headlines and what measures, if indeed any, will come into effect now that cases are rising exponentially. I know some of you will be saying but Covid? Why are you still talking about that Stanley? Well, because it is very much reality, Omicron is spreading like wildfire and whilst, (thank goodness), hospitalisiations and deaths are down, Omicron is spreading so fast that it is having the same effect on the global healthcare system. This is meaning that flights are being grounded and schools are being shut as people are calling in unwell with positive cases. Does this have an effect on oil demand? Of course it does. Does the oil market care? Nope. Amazing really. I imagine those same people are sitting behind a screen, at home of course, buying the market are the same people are switching their children’s laptop on and ensuring biscuit supplies remain well stocked. What a start to the year. Let's see how things pan out throughout the week. Good day, week and year to all.

Daily Oil Commentary

 Morning all. Brent is trading this morning at $79.41, up 0.18 and WTi is up 0.10 at $76.66. Now, it wouldn't be the last commentary of the year if I weren't to sum it up in the usual way, but first let me say thank you to all of you for allowing me to talk nonsense, and perhaps a little bit of sense, about oil markets throughout the year, quite what Richie Benaud, turnips and Daddy Long Legs had to do with the oil market confuses me now but hey, it's been fun. I look forward to more madness in 2022. Happy New Year to all of you. Right, 2021? Let’s see what happened:

Trump. Biden. Triden. Bump? Capitol Riots. Brexit - done. Lockdown. Tier 3,4 and 5. Impeachment. WFH. NFT's. COVID? Still? Yes, Covid still. Bitcoin. Bitbothered. RIP Captain Tom. Ever Given. Bulbous bow. Teaspoon to dig her out. Tom Brady, legend. Vaccine. OPEC+, everything is fineeee. Where's my flatpack furniture? Texas is freezing, Greta was right!! Run for the hills! Gamestop. European Super League, good move lads. RIP Prince Philip, you will not be forgotten. $1.9 trillion stimulus. Tiger in a crash. Navalny. Royal Baby Lilibet. Perseverance - is that a Martian or are you just pleased to see me? RIP Boycey. Traffic light travel system, really? Delta. Colonial Pipeline hacked, gulp. Messi goes to Paris. Bezos goes to space. Questionable design though, Jeff. Branson got there first, too! He makes a good pickle as well, wait. Branston? Chauvin guilty. OPEC+, everything is fineeee. Supply crunch. Freedom Day in UK. Hairdressers open again. It’s coming homeeeee, ermm, it's not though, is it? RIP Helen McCrory, or Aunt Polly as we all know her. Chip shortages. Not the French Fry kind. Hancock, you old dog! Netanyahu out. Vaccine mandates. Olympics. Nobody there. BMX gold. Cuomo steps down. Mexit - oh hiii Oprah. Delta. Delta. Delta. Kabul. Taliban. Meta. Hurricane Ida. Ronaldo back to United. Dodgeycoin. PCR test. Evergrande. Borders reopen. Vaccine. PCR test. COP26. Disappointing. POTUS finds another trillion. Britney is free. Radacanu! Gas supply issues. Fights at the forecourt. OPEC+, everything is fineeee. RIP Sir David Amess. Farewell Ole. Omicron. Ohmygod., not againnn. Hello Maj? Yeah, cheese party at my gaff, 10 Downing Street, BYOB. Ashes, pfff. Covid. Covid. Covid.

Booster.

Daily Oil Commentary

Morning all and welcome to the last Wednesday of 2021. Brent is trading this morning at $79.18 up 0.24 and WTi is trading up 0.14 at $76.12. "If you want something enough and your heart is pure, wonderous things can happen". Said Joey Tribbiani. Joey should have been an oil trader, you know, Days of Our Lives hasn't got a patch on being a day trader in this market because Joey is right, the bulls want $80 by year end and by golly gumdrops are they going to get it. Yesterday was a negative day in the mad mind of this commentary so today, let's be positive, shall we? And nooo not Covid positve smartypantssssss, ok?  Right, positive, let's give that a go. Ummm. I mean it all depends how you read news, isn't it? Covid, ignore that. Oil surplus in Q1-22, ignore that. Flights grounded; I didn't like jet fuel anyway so ignore that. Ooh, look out API showing that crude inventories dropped last week, gasoline stocks rose, sure but ignore that. MINEEEEEEE. And that is about as positive as I can be, and I don't need to say any more about it than that. $80 would just be a nice number for the bulls to finish the year on, and as rudimentary as that sounds, I think that that is probably on the mind of a few bleary-eyed traders this week. $80. I want $80 and gosh darn it I am going to get it. Fundamentally where are we though? Well, I would argue that Q1-22 is going to start off with one important indicator and I don't think that it is OPEC+. I think the market is fairly certain that OPEC+ will bring back planned production increases of 400kbpd.  By the way, I dismiss the argument that certain member countries cannot actually bring back production as agreed, i.e., Libya and Nigeria because those two countries have always faced problems when it has come to consistent production. I think the key indicator to get markets started in 2022 will be the Saudi official selling prices, (or OSP's if you're being fancy). They will send the signal to the market about where oil demand is doing well. Let's see what happens there. Let's also bear in mind that the higher flat price finishes the year then the better balance sheets look for our oil producing friends in the Permian, Shale patch etc etc. Or should we ignore that too? Yes, let's do that. Now, where's my sand? There you are. Nnnatts nater. Nnnood nayy.

Daily Oil Commentary

Morning all and I hope everyone had a very nice Christmas with their families and loved ones. Brent is trading this morning at…wait, hang onnnn, has the Christmas dust played havoc with my eyes? Nope. Brent is trading this morning at $78.90 up 0.30 and WTi is trading up 0.38 at $75.95. Well, it turns out Ebenezer has not left the building, Bob Cratchit did not get his turkey and poor Tiny Tim's walking stick has been taken away because frankly, today's commentary is a bit of a moan. Not if you’re a bull in this oil market, no no no, because Santa apparently did bring all of them their Christmas wish, a doctorate in all things COVID. Nothing to worry about, move on, Omicron is the end of it, and we can all rest happy in the knowledge that the "Santa rally", as they call it, is the start of the end of COVID. How about you tell my friends that who have been pretty poorly over the Christmas period unable to see their families because they have COVID? Or the people who are still stuck in countries where borders are shut? Or for everyone in France who is now having to work from home to contain the spread of COVID? Look, I am all for this bloomin disease to finally "do one", of course I am, but I cannot ignore the realities the world is immediately faced with! Yes, the latest variant of COVID has reduced hospitalisations and symptoms seem less severe but the fact is that Omicron is spreading faster than any other previous strain, and this will have an impact on oil demand. I quote Dr Anthony Fauci, “…given the rapid spread of this extraordinary variant, that we don’t get an overrun on hospitals, particularly in those regions in which you have a larger proportion of unvaccinated individuals,”. The priority of every country is to protect the healthcare system, this much we have learnt over the last two years of dealing with a pandemic, now that doesn't mean fully locking down or getting a pass from the police to go and buy a loaf of Mighty white and the latest copy of The Beano, but it does mean measures will be bought in to place so that we all remain vigilant to curb the spread of the disease. Saying that Omicron is the end of the pandemic, in my mind, is quite frankly dangerous and somewhat irresponsible. Does the oil market care about headwinds that Omicron may bring? Not a bit of it. Oh, hiiii sandddddd, let me just nestle my head in your warm beige glow…flump, fnnnahhha fnnnaahhh feemnmnmmnn. That's me ducking my head in the sand and talking. Because everyone else, so why shouldn't I? Commentary returns tomorrow. Hopefully a little bit chirpier. Nnnavv a nnnood nnnayy.

Daily Oil Commentary

On the first day of Christmas oil gave to me a lost bull in a bear tree, On the second day of Christmas OPEC gave to me too much crude oil (come Q1-22 at least) and a lost bull in a bear tree. On the third day of Christmas Arteta gave to me three dud defenders, too much crude oil and a lost bull in a bear tree. On the fourth day of Christmas Goldman's gave to me Four revised demand forecasts, three dud defenders, too much crude oil and a lost bull in a bear tree. On the fifth day of Christmas Elon gave to me Five Cryptoooooo tweeets, four revised forecasts, three dud defenders, too much crude and a lost bull in a bear tree. On the sixth day of Joe Root gave to me six test match centuries (for cal 2021), Five Cryptooo tweets, four revised forecasts, three dud defenders, too much crude and a lost bull in a bear tree. On the seventh day of Christmas 10 Downing Street gave to me seven stumbling BoJo's, Six root centuries, Five Crytpoooo tweets, four revised forecasts, three dud defenders, too much crude and a lost bull in a bear tree. On the eighth day of Christmas an OPEC minister gave to me 8 bullish forecasts (it was actually 11 but give me a break), seven stumbling BoJo's, Six Root centuries, Five Cryptooo tweetsssss, four revised forecasts, three dud defenders, too much crude and a lost bull in a bear tree. On the Ninth day of Christmas the Permian gave to me Nine drillers dancing, 8 bullish forecasts, seven stumbling Bojo’s, Six Root centuries, Five Cryptooo tweeettttsssss, four revised forecasts, three dud defenders, too much crude and a lost bull in a bear tree. On the tenth day of Christmas Anfield gave to me Ten Klopps a leaping, Nine drillers dancing, 8 neg crude traders, seven stumbling BoJo's, Six Root centuries, Five Crytpoooo tweeettttsssss, four revised forecasts, three dud defenders, too much crude and a lost bull in a bear tree. On the eleventh day of Christmas the Senate gave to me 11 trillion dollars (did they though Joe? By the way I know it’s 2, repeat above break, give, me, thanks), Ten Klopps a leaping, Nine drillers dancing, 8 bullish forecasts, seven stumbling BoJo's, Six Root centuries, Five Cryptoooo tweeettttsssss, four revised forecasts, three dud defenders, too much crude and a bull lost in a bear tree. On the twelfth day of Christmas Pfizer gave to me MY BIG FAT BOOSTER, Eleven trillion dollars, Ten Klopps a leaping, Nine drillers dancing, 8 bullish forecasts, seven stumbling BoJo's, Six Root centuries, Five Cryptoooooo tweeettttsssss, four revised forecasts, three dud defenders, too much crude and a lostttt bullllll innnnn a bearrrrrrr treeeeeeeeeeeeeee. 

Brent is trading in the mid 70’s by the way, of course it is. This just leaves me to wish all of you a very Merry Christmas, thanks for reading, supporting and abusing commentary all year, all of it is welcome. I will see you in the magical space that is the week between Christmas and New Year where we sum up the year that was 2021. Enjoy the break, be nice to each other, stay safe and most of all, enjoy yourselves. Ho ho ho.

Daily Oil Commentary

Morning all. Wednesday 22nd December 2021. Just a reminder for all those saying, "plenty of time left yet, time for another Quality Street". Brent is Trading this morning at $73.94 down 0.04 and WTi is trading up 0.09 at $71.21. Right, the last cracker of the season, and frankly, that makes me a little bit sad BUT, this one comes courtesy of my 6-year-old daughter - Why did the oyster leave the Christmas party early? Because he pulled a mussel. Love that. I just want to go back in time and revisit some headlines from this time last year - "New COVID variant in UK: spreading Christmas fear?", "Calls for National lockdown in England to curb spread of new COVID strain", "Pfizer and Moderna are now testing their vaccines to see if they work against the UK variant". Fast forward a year and the headlines read "European leaders are reinstating coronavirus restrictions as the new Omicron variant continues to spread through the continent", "Biden buys 500m test kits to tackle surge". I mean I could go on, but I won't, because oil markets don't care one bit about the above headlines or the fact that, vaccine rollouts aside, we are very much repeating history. Yesterday we clawed back all of the losses from Monday and traded up to a high of $74.27. To be honest, apart from a few miserable days for Brent in December we have pretty much tried to reach for the comfort shelf of $75 per barrel on Brent, and I think that the market just wants that number. It's a nice number and it more or less confirms a 50% rise in Brent since the start of the year. Quite a return if you're a fund investing in oil. Yesterday made a bit more sense to me however, what with the EU gas supply issue rearing its head again. To be honest, and I have said this before, that issue never went away, not really, it was still there but it just wasn't making the headlines. Jan TTF Natural gas Dutch futures were up around 20% yesterday and this was far too much of a jump in prices for oil markets to ignore and this proved the right call when news came out that 6 oil-fired plants in France have been brought online. Markets will be keeping a close eye on gas flows from Russia, but as I have mentioned all week, expect some volatile trading in what is a fairly gappy, illiquid market. Stats later so expect some more volatility around that time, too. Tomorrow's commentary brings about the annual Twelve Day of Christmas commentary and then will take a break for a few days. Keep safe, be smart and enjoy the wrapping. If you have something to wrap of course, which I don't. On that note, must dash. Good day.

Daily Oil Commentary

Morning all. Brent is trading this morning at $72.20 up 0.69 and WTi is trading at $69.48 up 0.87. OK, today's cracker - Just quit my job at the Helium factory. I won’t be spoken to in that tone! Excellent. Only two more left of these owing to the early Christmas trading window and, quite frankly, I might keep them going, just to add a bit of cheer. Righttt, let's get into it, shall we? Yesterday was pretty brutal and no, not because everything you found on Amazon (other website retailers are available) when Christmas shopping says, "Next delivery 3rd January", but because Brent at one stage was trading down to $69.28. We ended the day closing up $71.52, a remarkable rally from the low of the day and I can attribute no other reason for this other than the funds deciding that this was a Boxing Day sale at Harrods come early, and they swept up every available barrel of Brent and cashmere jumper they could. And it is jumper, because I won't call it a sweater. It's a wooly jumper, ok? Just like that bouncing sheep I know of. Anywayyyy, enough about posh long-sleeved upper garments, let's focus on oil. In essence, the fundamental realities in the oil market have not changed, and if anything, are becoming even more concerning, especially once the turkey is gobbled, the mince pies munched, and the grog all gone. I do get a bit frustrated when I read stories like …"COVID concerns are largely priced in…". I mean, how? How does someone know that? If you were looking at the COVID situation a month ago then yes, arguably the world has blown away 90% of the COVID dust and we were all looking at borders reopening and general frivolity over the Festive season. A month later? Yeah, nah. That dust has returned quicker than Harold Bishop did after a walk down a dodgy coastal path. Showing my age there. Yes, a month later and the COVID situation, as we all know, is honestly like winding the clock back a year. 73% of new COVID cases in the USA are now Omicron. The WHO says, " There is now consistent evidence that Omicron is spreading significantly faster than the Delta variant”. Davos has been cancelled. NYE celebrations globally have been cancelled. The news is coming in quicker than anyone can type yet apparently all this risk has been priced into oil markets? I mean, come on. I know that we will more than likely see support offered by OPEC+ to bring markets in to rebalance but if you are OPEC+ what data do you have to hand what Omicron has done to oil demand yet? It is such a fluid situation that nobody yet knows what Omicron is, and what effect it will have on markets. I think we could see some more bargain hunting throughout the day, but volatility is going to be the word of the week. Good day.

Daily Oil Commentary

Morning all. 5 sleeps to go and seriously, I need to do some shopping. Let's start with today's cracker because, well, it's about the only thing I will write today that is even mildly amusing, "I went for an interview. They said, “Can you perform under pressure?” I said, “I’m not sure about that but I can have a good crack at Bohemian Rhapsody”. Honestly, what am I going to do once the Christmas crackers are finally pulled? Don't answer that. Righttttt, oil. Brent is trading this morning, ermmm, gulp, down 2.59 at $70.93, and WTi is trading at $68.23 down 2.63. It's an overreaction, they said. Markets are oversold, they said. Well, "they" say a lot, don't they? I wouldn't be surprised if we break $70 on Brent today and then perhaps, we could test $65 at some stage during the week. The market I think can no longer look at the "don't worry, OPEC+ will save the day" mitigant here. Things are turning South out of pure fear that the Omicron variant of Covid-19 is wreaking havoc across the globe and that things are only, sadly but truthfully, only getting started when it comes to government reaction. The latter part here is the important bit because government actions will more than likely be severe enough to dampen the demand recovery which so many thought had about another month to go before we were back to pre-Covid levels. There is another issue that is being largely ignored and one that I think is probably the biggest business story of 2021, and that is the situation around Evergrande in China. Economic growth in China has been something that markets have become so complacent with over the last few decades, the Evergrande issue, however resolved, is going to cause some pain for people, and this is something the market can now no longer ignore, so keep your eyes on headlines around that. Back to OPEC a sec - last week Prince Abdulaziz bin Salman Al Saud, Minister of Energy of Saudi Arabia, warned oil speculators they would be "ouching like hell" if things were to take another dive as they did on Thanksgiving Day. The thing is though, that market sentiment seems to have turned fearful and I'm not sure there is much even OPEC+ can do when that fear is reflected in people taking risk off. Keep your eyes on headlines from OPEC ministers if we do break through $70, the January meeting could indeed see the return of some production paused. Good day, and week to all.