Oil commentary - 17 May 2018

Morning all and Ramadan Kareem. Brent closed last night at $79.28 up 0.85 and WTi closed up 0.19 to $71.49. This market is, quite frankly, absolutely peerless in making me look like a numpty at the moment. You may argue that many different things make me look like a numpty and I would tend to agree with you but Brent being up at $80 per bbl? I'll live but it really is starting to just bore me to be honest. Brent/WTI has widened to 7.67 and with all this crude oil the US are producing it makes a barrel of the Permian’s finest that much more attractive to just about everyone. I maintain what I said last week regarding why Trump reimposed sanctions on Iran - business. It was a pure and suimpole business decision to assist the US energy sector. I see that the IEA have finally said that demand isn't coming in as forecast and they have reduced the outlook for 2018 down by 100kbpd. This is a fairly significant shift considering they, and just about everyone else was saying how amazing demand will be this year. Don't get me wrong it has been fairly good but it was highly doubtful it was ever going to reach the numbers all the Brainiac’s came up with. Eventually high prices are going to hurt demand - that much is simple to work out. I wonder though if this Brent diff to WTi of over 7.50 per bbl is the doing of the US oil producers themselves. I'll leave you with this from ex-senator Mr Byron Dorgan who was on the energy policy committee to the White House, "If the Administration does nothing, high gasoline prices will continue to increasingly burden our economy, taking millions of dollars out of the hands of families and putting it straight into the pockets of OPEC.". The thing is Dorgy, it's not going to OPEC any more, is it? Good day.