Oil commentary - 2 August 2023
Morning all. Before I answer the “Ahem, and where have you been, Stanley?” questions, just give me a moment please. Brent is trading this morning at $85.61 up 0.70 and WTi is trading up 0.70 at $82.07. Right, just hang on. Yes yes yes I can hear you all, but just hold your horses. Or actually, hold your dolphin and polar bear friendly, sustainably sourced, made from mud and fully recyclable electric driven e-cart and let’s just see where I last left off, shall we? (Which was early April. I know I know) but my last commentary - HAVE A GUESS where Brent was trading? Go on. Have a go. Go onnnn. It will set you free. I promise. OK, GO! Eeeeerrrr uhhhh (Family Fortunes claxon) Wrong. Back of the room, collect your COP-28 hat and get to the back of the room. Brent, 4 months ago, was trading at $85.23 and WTi was trading at $80.23. So let me get this right. This commentary takes a 4-month break and what exactly has happened? An increase of 38 cents on Brent. I’m not going to discuss WTI, because most of it now ends up in the Brent pool anyway (probably the biggest event that has happened in the crude oil market since said commentary sabbatical). I mean, there are a few talking points around why crude has remained roughly where it has all year (OPEC+ comments and recession driven doom-mongers aside), but, in essence, does it even matter? Isn’t the point of groups like OPEC+ in energy markets, central banks like The Fed and Mary Poppin’s Bank of England for monetary policy (why does the Bank of England always remind me of Mary Poppin’s?) to ensure stability and equilibrium in the very markets that they are there in the first place? What will happen with all this demand forecast? Will supply continue to be choked off? Will Arsenal win the league finally? Shall I ask another question? Look. One thing is for sure is that the first half of 2023 has been remarkably, calm? Interest rates aside, natch. How will the second half pan out? Well, you will just have to tune in to your friendly neighbourhood oil commentary, won’t you? Nice to be back and I hope you are all well. Good day.