Oil commentary - 27 March 2024

Morning all. It’s been a while, hasn’t it? And noooo, I’m not just sending a commentary out because it’s a hint about sending me a chocolate Easter Egg, ok? If you are interested though, pls send it to Matt Stanley c/o Willy Wonka, 1 Egg Street, Eggham. EGG1. Thanks. Brent! Come here youuuuu. Brent is trading this morning at $85.42 down 0.83 and WTi is trading down 0.73 at $80.89. So, Brent broke out of that range it has been in more or less all year, huh? Well, yes, but I mean, it’s hardly a “break out” is it? A month ago, Brent was trading at $83.70, today it’s trading at $85.42, so yeah, nah. One thing is for sure though is that Brent is sitting pretty comfortably above that crucial $80 per bbl so many OPEC, and US oil producers (because they are quite important, too, you know?) yearn for to keep the person paying the bills happy. In fact, Brent hasn’t settled below $80 per barrel since the very early, frosty days of February, and this is something of a triumph for OPEC+. Reasons for this stability slash “elevated” crude oil price? OK – big breath anddddddddd let’s go - demand higher, possible lower interest rates, less oil, drone strikes in Russia, lower inflation, sanctions enforcement, OPEC+ cuts, macro sentiment bullish, unseasonal high crude oil demand, crude oil balances shifting, refinery turnaround season over, global conflicts, the threat of global conflicts spreading wider and China, well China being China and buying a lot of oil. Phew. So, quite a lot. Of course, we must balance this out with some bearish factors, because I am jolly well-balanced person/ commentator, don’t you know? OK, let’s go (not quite as big a big breath) interest rate cuts, will they? OPEC+ production, lower oil demand. So, not quite as much for the bears as there are for the bulls to rest comfortably with, hence, higher oil. According to my colleague, Mr Viktor Katona, the big needle mover for crude oil prices coming up will be what happens with Venezuela, and sanctions thereof, this is due to happen around the 18th April, so shout out to Siri now “Hey Siri, set a reminder on the 18th April about Venezuela elections and the US reaction vis-a-vis sanctions”. You’re welcome. Lastly, thoughts out to everyone affected around the tragic ship collision on the Francis Scott Key Bridge in Baltimore yesterday morning, prayers with all. Good day.