Oil commentary - 23 March 2023

Morning all. Thursday and JAY-POW strikes again! More on his Federalnessness (real word) in a moment. Brent is trading this morning at $76.03 down 0.66 and WTi is trading down 0.70 at $70.20, back above $70 again, so psychologically important if you are of Bovine nature. Moooooving on – so Jay-Pow, shall we quote him maybe? A little bit? OK – “We believe that events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes. It is too soon to determine the extent of these effects and therefore too soon to tell how monetary policy should respond”. Nicely put. I mean it was a real difficult one, a 50point hike and that would have been too much, everyone would have panicked and we would all be living under a bridge, trying to grow our own potatoes like Matt Damon from The Martian. If he hadn’t hiked, then it would have probably signalled more carnage from the banking sector and that wouldn’t be pretty. So 25bps it is and back to thinking about Tesco Value Chicken we all are again (other Supermarkets are available). Oil however didn’t mind it. It kind of looked at it in the same way a delusional football fan feels when you claw back a goal just after half time when you’re 3 nil down. Hope. Let’s see what pans out but I have a feeling that the next Fed meeting will probably be the most important of the year, have interest rates peaked at 5%? Hmm, let’s wait for inflation data. Back to oil and staying on the Westtttt sideeee of the pond, US oil inventories did little to stoke the fire of the bulls with builds on crude. It’s worth noting however that US crude exports are hitting record highs this month and a lot of Texas’ finest is heading to the EU. New patterns you cry? You will have to find out more from your friendly neighbourhood commodity data company there, won’t you? Pluggginggggg. Good day.