Oil commentary - 14 May 2021

Morning all and first to all readers and subscribers may I wish you Eid Mubarak lakum wa-li-‘a’ilatakum. Brent is trading this morning at $66.89 down 0.16 and WTi is trading down 0.09 at $63.73. So, just another manic Friday? Let's wait and see but I tell you what, this week has certainly been interesting. Let's sum it up. UK not opening borders. Colonial Pipeline hacked. Man City win the Premier League. Elon Musk says Bitcoin isn't energy efficient enough, because yeah that's the problem with Bitcoin. Arsenal beat Chelsea at Stamford Bridge for the first time in ten years. Masks no longer needed in the US if you're vaxxed. Crude dumps 4% along with about everything else. Bitcoin trades below $50,000. So yeah nah yeah, just a normal week then? Oh, and news this morning that everyone in Singapore has to work from home for the next month to curb COVID cases in the community. And this is where we have to face reality. In the last 7 days India have reported 2.7 million COVID cases. Borders are shut. And Pakistan, Nepal, Bangladesh and Sri Lanka are facing similar issues and borders are shut there, too. From the UAE at least. And yesterday there was an EIU article on China, quote "The Economist Intelligence Unit now expects China to have vaccinated 60% of its population by the second quarter of 2022. However, under its precautionary approach, the government will not immediately relax quarantine requirements for tourists returning from overseas. We expect outbound tourism to return to pre-pandemic levels in early 2024.". Now, some say that I'm too negative and only report grim news. I don't and that is certainly not my intention but when I read about an oil market that has hope pinned that things will return to normal in the second half of this year, I simply cannot allow that to be pass me by without comment. Demand is going to take a hit owing to renewed lockdowns, that is clear, and supply from OPEC+ is returning regardless, however if Brent breaks through $65 and flirts with $60 then expect the "we will do what we have to, when we have to" headline to pop on a screen near you. Have a great weekend.