Oil commentary - 18 February 2021

Morning all. Brent is trading this morning at $64.84 up 0.50 and WTi is up 0.41 at $61.55. Brent is threatening to break through $70 and frankly, I can't see a lot that's going to stop it. There was a rumour last night that the 1mn bpd of voluntary cuts Saudi Arabia pledged at the beginning of January would be reined in, the market digested this news, we corrected down to $63.04 before it looked around and waited to see if anyone else was going to say anything, you know that awkward silence you get when you've made a fat joke and you overstepped it? breathe innnnn, nobody? OK. Bosh up we went. Dismissed quicker than Unai Emery? Who? Anyway, back to oil. The real reason for the strength, apart from reduced output from OPEC+, a healthy vaccination programme and free money is that the US oil system is currently frozen. Literally. Well, 4million barrels are, at least. I'm kind of neutral though as to the effect the big freeze is having, lower crude production because it's cold means lower refinery runs as they will be closed too. So, to me, it's kind of net net. But the market doesn't care, with all the bullish news why not throw a bit of bad weather as a contributing factor to underlying bullishness? Yeah, throw it on. Of course, the real story we should be talking about is what happens when OPEC+ meet early march, one would have to argue that production stages a comeback. Especially with fiscal budgets from most members taking a bashing last year. Why let other producers outside the bloc take advantage? This is where we are. Delicately poised. I'll leave you with this quote I recently heard, strikes me that the bullish funds must endorse this too. "A happy person is not a person in a certain set of circumstances, but rather a person with a certain set of attitudes". Good day.