Oil commentary - 27 April 2021

Morning all, technical issues sorted, normal service resumes. As far as commentary goes anyway, anyone idea what normal even is anymore? Brent is trading this morning at $66.12 up 0.47 and WTI is trading up 0.49 at $62.40. Ok, so what have I missed? Well, the last time we spoke Brent was trading at $66 per barrel, so not a lot of change on flat price. But the awful COVID-19 situation in India seems to be deteriorating daily and with it, the markets confidence about oil demand staging the comeback many forecasters thought it would. This reality hit the crude oil markets yesterday morning and we traded down to a low of $64.57 on Brent. This negative start to the week though was quickly abolished at bang on 9am New York time and Brent staged a remarkable recovery hitting a high of $66.10 before settling at $65.65. Was there a reason? Well ultimately, I suppose you could boil it down to the fact the OPEC+ joint technical committee kept its growth in global oil demand this year at 6 million barrels a day. Hmm. Is it just me or is that a massive hmm? Like when I say to my wife "I'll definitely be home by 10". That kind of hmm. Don't get me wrong, oil demand is picking up, domestically at least, driving in the USA and China continues to increase as does jet fuel. But, like I've been saying, it's patchy. I'll give you an example - Seven of the top 10 airports for passenger traffic in 2020 are in China, with three in the United States. Dubai used to be the busiest airport in terms of passenger traffic owing to the extraordinary job Dubai Airports have done in growing a hub business model. Last Friday the UAE - India travel corridor closed and apart from a few people who are able to travel, passenger traffic is going to decrease massively. Dubai - Mumbai was the third busiest route Q1-2021 and there were 300 flights a week from Dubai to India. This route being closed is, of course, only going to have an effect on jet fuel demand and let's not forget that 50pct of the demand returning is supposed to be via jet fuel. Keep your eyes on the headlines, and good week to all.