Oil commentary - 20 September 2023

Ah ha! Well Good morning my fellow oil chums and Welcome to Wednesday, Brent is trading this morning at $92.89 down 1.45 and WTI is trading down 1.30 at $89.90. FED DAYYYY!! Insert claxon. Actually, insert Fed Day jingle “On Fed Interest Rate Day, don't you frown, will it go up, or is it going down? Keep an eye on the news, don't delay, It's Federal Reserve Interest Rate Day, hooray!”. I can’t take the credit for that; I have my 4-year-old to thank for enjoying it to the point where she is skipping round the house singing “interest rate day! Hooray!”. Don’t tell me I don’t know how to parent! Anywayyy, moving on to oil. A bit of a pause on the rally today it seems then? And I use the word pause there because that’s exactly what I see it as. Fundamentally nothing has changed since yesterday, right now, going in to Q4 the question on everyone’s mind is – Would you rather fight one horse-sized duck or a hundred duck-sized horses? NO, not that, but the thought of a horse sized duck? Frightful. No, the question everyone is asking – Is there enough oil to meet demand going in to Q4? In the blue corner we have upcoming refinery maintenance and a seasonal slow down in demand for oil products. In the red corner we have OPEC+ cuts, an uptick in demand from places like China and what Jay-Pow! does later. Right now, the red corner is bashing the life out of the blue corner. A purple mess everywhere, probably. Here’s where things circle back to the Fed Meeting later – a pause in interest rate hikes seems more than likely, minutes will probably read that the US economy is faring better, but they have one eye on high energy prices and the dreaded inflation argument this brings with it. Hence todays pause. So, Jay-Pow! I am looking at you my fiscal friend, what does the future hold? Hmm, keep your eyes on those headlines and your eyes on EIA data due out later, but for the time being, I must skip!! Interest rate day, hooray!! De de de doo doo dum dum. Good day.