Oil commentary - 13 June 2024
Morning all. Thursday. The THIRD day, OK? Second reference to Joey Tribbiani in a week, and I offer no apologies. Brennnttttt, where are youuuuu? There you areeee, hovering in the low 80s, you little piece of chocolate pieee. Come hereeeeee, you mcccchchchchchchhhhh. Ahem. Brent is trading this morning in the low 80s!! at $82.41, down 0.19, and WTI is trading down 0.16 at $78.34.
I know what you’re thinking. You’re thinking, did you know that bananas are a berry, but strawberries aren’t? Hang on, hang on, hang-onnnn. What? (It’s true.) No, you’re not thinking that, but hold my hop-based beverage whilst I consult Wikipedia. What you are REALLY thinking is, Stanley – all this noise last week about OPEC+ roiling markets with all this oil coming back, and then moody forecasts about demand from the IEA, and then moody Jay-Pow! giving us a dot plot that isn’t a plot, more like a drawing you would be proud to see from your one-year-old child. PEN. PAPER. DOT. That’s it. Ahhhh, well done, son. A duh pluh. Not a dot plot.
Anyway, enough of criticizing the man who holds the keys to the world’s biggest economy for a moment. Back to oil – back to the low 80s for Brent, and it seems pretty happy to be there, if I’m honest. The low this year for Brent was $74.79 on the 3rd of January, and the high, seen on the 12th of April, was $92.18. Not that wide a range considering the volume of trades that happen on a daily basis in crude futures markets. The mid-point between the low and high of the year would be $83.49, and whether it be coincidence or there be some mathematical Fibonacci algorithmically justifiable reason as to why Brent has hovered around this mid-point is beyond me, but hovered it has for much of the year.
I argue, though, I don’t think it is anything to do with maths, or 200-day moving averages, or what the latest data reads as to who has what positions on the floor. It is purely a happy place. Oil markets in the low 80s are in a Goldilocks state, and OPEC+ is very happy with that, thank you very much. The balance has been struck between supply and demand. Sure, it’s fragile, but oil markets always will be with so many external factors to be considered. The thing is, though, we all love a bit of drama, don’t we? How much longer can Goldilocks keep out of that extra big bed, I wonder? And not jump on the smaller one and break it? Hmmm. Let’s see what demand stats start looking like as we come into summer, shall we? Now, where’s that banana? Berry my a…! Good day.