Oil commentary - 16 December 2021
Morning all.?Brent is trading this morning at $74.66 up 0.78 and WTi is trading up 0.84 at $71.71. 9 sleeps until the big day and I am going to do my best to sound positive and full of Christmas cheer.?Shall we start with a cracker??Oh, go on then - What do you call a child who doesn’t believe in Santa? A rebel without a Claus.?Right!?Enough of that, let's talk about oil. Well, it seems to be doing nicely actually.?I am really trying my best today to not get bogged down with what I think is consuming everyone's minds this morning and that, of course, is news about Covid.?So let me just get it out of the way.?Dr David Nabarro, special envoy on Covid-19 for the WHO, said, "I’ve been watching this pandemic and working on it since January 2020, and I have never been more concerned than I am tonight, not just about the UK but about the world.” Of course, there were various press conferences going on around the globe last night and all of them conveyed the same message, one of extreme concern about the Omicron variant of Covid-19, but Dr Nabarro's sentence is about as grim as it gets.?If I selfishly talk about my home country of the UK, then yesterday 78,610 people tested positive, a record, and Dr Chris Whitty warned of worse to come.?I understand, and completely agree with, that we have to learn with Covid, that variants will emerge, and we will be in situations like we are in.?What I cannot just get on with is that variants are ignored by market participants.?Statements emanating from various news outlets regarding Omicron took everyone back, but at the same time we had EIA release data on weekly oil stocks on the US.?Which surprised to up the upside and of course we traded up.?Brent traded down to a low of $72.50 yesterday and this was understandable bearing in mind various headwinds oil markets face themselves with come Q1-2022.?However, everything was ignored once stats came out as the market celebrated that demand for oil products in the US hit a record high.?Brent ended the day at $73.88, up 0.43.?So, what does tell us about what market participants in the oil market right now??Is data coming out of the US the only driving force that the market needs to consider??These are rhetorical questions, of course, but I guarantee (sadly) that the Covid situation will be a lot worse this time next week than now.?Yes, we are learning to live with Covid, but if that means that the situation needs to be ignored and dismissed then Santa may jolly well leave you nothing but coal in your sack.?Actually, not coal, because Greta would go mad.?Just a stick.?Yes, a socially responsibly, well cared for, stick.?Commentary returns Monday.?Good day to all.