Oil commentary - 14 September 2021

Morning all.?Brent is trading this morning at $73.90 up 0.39 and WTi is trading up 0.40 at $70.85.?I'll be honest with you; I don't get it (shock Stanley).?No don't be like that, I'm being serious.?I honestly don't get it.?Yesterday the OPEC+ report came out and whilst there was a minor reduction to demand growth forecasts for Q4-2021, the report in itself was bullish.?I don't know why I don't get it; they have a job to do, and they are hardly going to downplay demand for the very thing they represent.?That would be like a brain surgeon turning up with a bucket and spade in an operating theatre asking everyone to not worry.?You just wouldn't do it.?Hiii Doctor Nick, hiii everybodyy.?Back to OPEC+ though.?What concerns me is that whilst other reports from agencies which are out over the next couple of days will likely be along the same lines as OPEC+, the fact is that the demand can has been kicked down the whole road that is 2021.?The M2021 we shall call it.?It’s more reminiscent of the M25 if I'm honest, which for the uninitiated is a very annoying road that circles the home counties around London and there are many traffic hotspots and bumps along it.?Yes, 2021 is the M25.?What we have though if we look into these reports is a massive "Yeah, nah, 2022, that's where it's at, everything will be fineee".?Maybe, I hope so.?But one thing is pretty much nailed on to return in 2022 is the return of oil production.?From OPEC+ we can expect more or less pre pandemic levels of production by May, then we have US oil production which in October is expected to rise back to 8.1 mn bpd, the highest since April 2020 and then of course we have apparent progress in Iranian talks.?The latter though I shall dismiss for the time being, politely of course, I don't see an agreement being reached for a while and even if one is agreed oil won't return until the middle of next year at the earliest.?Look, 2021 was all about the return of demand in the second half and whilst demand growth has been fairly robust this year, Q3 has been disappointing, and it clear now that agencies don't see 2021 panning out as hoped.?All eyes on Q4 I suppose, but in the meantime all focus is on Hurricane Nicholas in the USGC knocking out yet more production, and for the time being at least, that will do nicely for the oil bulls thank you very much.?Good day.