Oil commentary - 15 October 2021
Morning all and welcome to Friday.?Brent is trading this morning at $84.92 up 0.92 and WTi is trading up 0.85 at $82.16.?I want to talk about over doing it.?Not me.?That wouldn't be like me at all now, would it.?No, a friend of mine who about 25 years ago explained to me why he had a big bump on his head.?One Saturday he went out with a few friends for a few drinks.?He kept on informing his wife that he was going to be later and later before she said, "Don't worry love, stay out as long as you like".?Hmm.?So, he did.?And got home at about 8am the next morning.?He gingerly walked into the kitchen and there was his wife, standing by the stove and said "ooh, you've had a long night, would you like a sandwich?".?He wanted a sandwich.?He went to take his shoes off and BANG she hit him over the head with said frying pan.?Hence bump on the head.?Now, I'm not condoning ANY form of violence whatsoever so please don't write in and sue me.?BUT this oil market is the sandwich after the night before.?It's just gone too far.?Brent at $85? I mean, really??Gasoil structure nearly a dollar backwardated in the front of the curve??I would argue that even the most bullish traders are not sitting back and wringing their hands together like Mr Burns and muttering "exxxxceeeellleennnt".?They are sitting there with pursed lips, waving their head back barely able to look at the screen "ooohhh we may have overdone it guys".?It’s funny because this time a year ago those same traders were sitting there looking at their screen, like how a confused pigeon looks down at a piece of stale bread, you know that kind of head shake, look, head, look, peck, mine, ohh maybe not, mine, oh, not bread, mine.?You get it.?The "energy crisis" we have seen over the last few months - is it a crisis of a lack of available fuels??Or a manifestation of poor governance??Answers on a post card on that one but I will leave you with this - "Gas markets, coal markets, other sources of energy need a regulator. This situation is telling us that people need to copy and paste what OPEC+ has done and what it has achieved." said Saudi energy minister Prince Abdulaziz bin Salman.?Imagine that.?Copy and pastes of OPEC+.?That really would fuel a coffee shortage.?Listen, ignore the headlines, most people do anyway, sit back and enjoy your weekend.?Lates.??