Oil commentary - 4 February 2022

Morning all and welcome to Friday.?Brent is trading this morning at $91.45 up 0.34 and WTi is trading up 0.51 at….wait for it….drumroll please…kerching!!! $90.78 and the whole of Texas are in the pub.?Wrapped around a fire, telling stories about the grim old days when "I remember y'alll, when just under two years ago, WTi be trading down below zero.?Sweet lord they were crazy tahhhmmss".?Something like that.?Anywayyyyyy.?Oil??Yes, let's do that but specifically today I want to talk about gasoil.?Or diesel if you're European.?Or heating oil if you're American.?First though, let's talk about another day in this oil market that was yesterday.?More or less as soon as the Singapore eWindow started at 1200pm UAE time the market slowly but surely sold its way down to $88.02.?This was generally being perceived in the market as understandable, it seemed the rhetoric around geopolitical tensions were easing somewhat and there was an audible "fair play mate" going on around oil markets. Ha. Well, that lasted about as long as Claudio Raineri at Watford and bosh, the USA cracked open an eye lid and we were soon at $91.30 on Brent before you could say "eeeehh but I was very good at City of Leicester".?3 dollars volatility is something that only a year ago would have been met with a headline from the Daily Mail "OIL PRICES SKYROCKET, GET TO THE FORECOURTS NOW".?But now??In 2022??Just another day.?Just another day in the oil trading world we live in.?I expect this volatility to stay around until we see either some real easing of tensions and today's underlying bullish reason - ice storms in Texas shutting in some oil production.?Texas frozen, imagine that? Greta must really think hell has frozen over.?Anywayyyyy, enough of that.?Let’s quickly talk gasoil.?Well, what to say??March ICE gasoil is trading at $815.25.?If the end user thought January prices were concerning then they seem to be a drop in the ocean compared to the way February is looking, wow! It’s an interesting one though.?Markets are so heavily backwardated that there simply isn't a reason to store oil in excess of what one actually needs as you are running the risk of losing money.?Then a prompt buyer comes in and what happens??Ah haaaa, a perfect storm.?That's where we are.?Except this isn't a storm in teacup.?This is a storm in a distillate barrel.?$1000 per mt gasoil??Hmmmm, let's see.?Have a great weekend and enjoy yourselves.?Over and out.