Oil commentary - 11 February 2025
Morning all. Tuesday. Fast approaching the middle of February, which is nearly the middle of the first quarter of the year, which is like 3/26ths of the year, which is like 11.54% of the year so far, which is like… wait. Way too much for this time of the morning. Oil! Let’s. Brent is trading this morning at $76.37, up 0.50, and WTi is trading up 0.44 at $72.76.
Ahh, the life of a journalist in the energy industry—or journo, if you’re in the know. This time last year, headlines read, "Oil prices rise as Middle East tensions escalate." Fast forward a year, to the year of the Donald, and today’s headlines read, "Oil climbs on supply worries, Trump tariffs check gains." Just FYI, this time last year, Brent was trading at $82.00; today, it’s $76.37—so about 7% lower.
I wonder though, what does the reporting fraternity prefer—a world where Donald and tariffs are part of the mix, or one where they’re not?
That’s rhetorical, of course. But what’s not up for debate is whether the oil market now shrugs off a Trump headline more easily than before—I’d say yes. The issue is that the whole "drill, baby, drill" narrative he keeps harping on about gets a bit tricky when, at the same time, he wants lower oil prices. And I quote, "I'm also going to ask Saudi Arabia and OPEC to bring down the cost of oil."
So, you want the US oil industry to invest a load of money to produce more oil, but you also want the price of that oil lower, meaning margins get squeezed. Ermmm. OK. Donald, you’re fired.
Right, let’s move on from all things Donald for a moment. This is the part where I shall mostly be stealing work from others. Today’s particular instalment of "Oil commentary by Matt, the Magpie Stanley" is courtesy of my colleague Johannes Rauball, who wrote a rather splendid number yesterday, summarised here:
"Crude prices ticked up on Monday as global crude stocks hit fresh multi-year lows. Tight inventories will keep a floor on crude prices over H1, despite a lengthening in the global crude balance. Global crude stocks have fallen to fresh multi-year lows this week, with inventories at 3,240 Mbbls as of writing. This marks a decline of 120 Mbbls since late November, the lowest level recorded since our data began in January 2017."
So, there you go. Thanks, Johannes—saved me there. Want to read the whole thing? Well, you’ll just have to reach out to your always-friendly Kplerian, won’t you?
Good day.