Oil commentary - 3 October 2019

Morning all. Brent is currently trading at $57.55 down 0.14 from last nights close and WTi is trading at $52.62 down 0.02 from yesterday. A pretty dismal day yesterday and a pretty grim start to Q4 to be honest. It seems like the Halloween ghouls are already out and about as so far in October we haven't traded above $60 yet and it could be that a new range is upon us, $55 - $60. The main reason for yesterday’s drop in crude was down to those old blighters the EIA with their bearish oil statistics. Builds on crude as opposed to a significant drop as reported by the APi sent us down to a quite frankly scary level of $57.22 before someone decided that was far too weak and we settled 47c higher. $50 is going to be absolutely vital for the US oil producers so I imagine we will see some serious support levels just above that. The irony is, and this is something I have been banging a drum about all year, is that the theme this year has been one of hope and then grim realisations. Hope that 2019 was going to yield astonishing demand numbers but in realisation they have been more disappointing than the Spurs back 4 so far this season (ah how nice it is to say that and not use the Arsenal back 4. Note please "so far"). If flat price drops to levels that woo the consumer to travel further afield as energy prices come down then Q4 could, ironically, be 2019's saviour. Stranger things have happened - this time last year Brent was trading at a seemingly mind boggling $86.29 and I was getting sized up for a mankini (for anyone new to this commentary, that isn't some kind of weird fetish - it refers back to a stupid bet I made about Brent hitting > $85). Fast forward a year and $85 bucks a barrel looks like an unreachable and downright delusional target. The thing is though is that arguably tensions regarding crude supply are at heights not seen for a long time - certainly a lot higher than this time last year - so why aren't we back up to those levels? Oh hello China-US trade war. Still nothing tangible out of anyone is there? The longer it goes on, and it does seem to be a progress vacuum right now, the more and more distant even $65 on Brent might look. Good day.