Oil commentary - 29 September 2017

Morning all and Happy Friday. Brent closed down 0.49 last night to $57.41 and WTi closed at $51.56 down 0.58. What has the week bought us? Well if you're Marilyn Monroe then you have a new neighbour for all of eternity, RIP HH. But what about the oil market? APPEC aside Brent has had a fairly dramatic week. We didn't get to the swimming costume Boat Quay run levels of $60 per bbl but I'm not going to lie, when $59.50 was being flirted with I was nearly getting ready. Since those dizzy heights crude has fallen however. W/O/W we are up 1.7%, exactly the same as last week. In fact September has seen close to a 10% rise on Brent. Impressive. So the question on everyone's lips, where do we go from here? Personally I don't see us rising above back to levels we were at during the start of this week. I see no real evidence that can bring us out of the range bound market we have been in for some time now. People seem to be ignoring the facts that arguably the world’s biggest swing producer, the USA, haven't really shown the ferocity in Q3 of production increases that they showed in the first half of this year.  This fact has been ignored by the bulls in the same way that a teenager ignores its Mother’s requests to clean their room. However it is inevitable that as nice as any Mum in the world is eventually you have to yield and I think the oil bulls may be told in the next couple of weeks to clean up their mess as well. The US rig count both this week and next I feel will be quite significant for the future of the demand and supply balance because let's face it, apart from some over enthusiastic economists I don't see where demand is increasing to the point of rebalancing the market. An increase in supply and we could see the market drop fast. All eyes on that later. I wish you all a smashing weekend.