Oil commentary - 5 June 2024

Morning all. Wednesday. Or if you’re Joey Tribbiani, the whenwhatwho day? Anyone who hasn’t seen Friends will need to watch it. Also, if you haven’t seen Friends, what on earth have you been doing??? Anyway, oil. Brent is trading this morning at…Actually, I don’t want to say. Just in case I get shouted at by an OPEC minister or two. Because I have heard they read this commentary, don’t you know? Hahahaha. Be brave Stanley. Be braveeeee. OK. Brent is trading this morning at $77.52 flat on the day and WTi is trading at. Oh god. Should I? What if an angry American comes and attacks with me a Stetson and a jolly strong wave of his fist? Some say I stereotype; I disagree. OKKK! WTi, trading at $73.21 down 0.04. I said those oil prices so fast, it was like when I let management at home know that I may head off for a quick drink with friends down at said local establishment “headingtopubbebacklater”. Pyyooowww. I joke of course, as if I am brave enough to do that! No. but seriously – oil prices. Are we surprised? Some people are a little miffed about the market reaction to the OPEC meeting over the weekend. Let’s see what the headlines read, or what OPEC Towers, Number One Vienna Street, Vienna, were hoping how they would read “OPEC AGREE HISTORIC EXTENSION CUTS IN TO 2025”. Nice, sit back with a brew and watch Brent head back to $90 per barrel before you can say “maintain those demand forecasts lads”. Nope. Nah ah. Market read said headline, broke it down, consulted with a colleague or two (because the actual market reaction on flat price was fairly muted until around 10am London time when Brent was trading at $81.40ish) Fast forward a few hours later and Brent had broken through $80 per barrel, the 200-day moving average and forecasters were scrambling around looking for their bifocals and year to date data(Kpler data, natch) This time last week, Brent was trading at $85.02. Today it is trading at (braveeee) $77.51. A drop of 9%. Not what OPEC+ were hoping for, but, as I allude to above, whilst the cuts have been extended, the meeting also agreed to a steady return of production throughout the course of 2025. This is what the market is focusing on. More oil, in a market that is still incredibly fragile on a supply/demand basis. Still, not all bad. Lower oil prices mean lower prices at the pump, and during an election year, this will keep Grandpa Joe very happy. Now, if you’ll excuse me, I’m off to ask management for a pass. Good day.