Oil commentary - 26 July 2024

Morning all. Friday. Excellent. The start of the Paris Olympics. I do love the Olympics. It’s the only time in four years you can reply to your partner with “Sorry love, can’t make dinner tonight with Colin and Joyce, the Modern Pentathlon is on.” Ha. Or you’re down the pub with your mates discussing who is in contention for the canoe slalom. Fast forward a couple of hours later and all of a sudden you have nailed the technique on your stool and you’re searching Amazon for a canoe and one of those caterpillar suits they wear. Olympics, love it. Still, could be worse, you could have a swim in the Seine coming up. Gulp. Actually, don’t do that.

ANYWAYYYYY, oil! Brent is trading this morning at $82.35, down 0.02, and WTI is trading down 0.04 at $78.24. So, not a great week in oil markets, but seeing as I always look at the glass as being half empty, it could have been a lot worse. At one point yesterday, the gloves were off, and the bears were dancing on the desks of bullish oil traders. We went down to a low of $80.09, and at one point it looked like if we broke the psychological $80 per barrel that so many of those OPEC countries pine for, we would quickly drop down another chunk toward $75. A drop below $80 isn’t just significant for OPEC but for the whole oil complex, and it felt like breaking $80 would lead us to the mid-70s. This then opens up the age-old discussion: what do OPEC do?

But alas, like Eric the Eel in the 100m Freestyle swimming, Brent didn’t give up. We closed at $82.37, which is impressive considering how long Brent was trading negative yesterday. It has been one of those weeks, really. We opened Monday trading at $82.80, and I wouldn’t be surprised if we settle today at a similar number.

Moving to equity markets for a moment: this week was sizing up to be one of those weeks that would linger in the grim summer holiday memory bank, but actually, markets are only down by around 0.5%, even with the fairly negative earnings coming in from the likes of Tesla. Oil was following equity markets and, while it's down for the third week on the trot, the drop is negligible.

Why a drop though, if even a small one, though Stan? Good question. When in doubt, blame Chinese oil demand. That seems to be what everyone else is doing. I’m not so sure I’m willing to jump to that conclusion, but when in doubt, blame China. Hmm.

Anywayyy, if you’ll excuse me, I’m off to read up about the latest news on what’s happening in the world of sports climbing before the event starts. Have a great weekend.

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