Oil commentary - 6 February 2024

Morning all. And before you ask, I have been exceptionally busy, ok? I am a very important person, ok? Ahem. Right, moving on, OIL! And would you believe it, after two- and a-bit weeks of no commentary Brent is trading where? Have a guess. $78.16 up 0.17. WTI? Go on, you did pretty well on the first try! Go onnnn. BOSH! Spot on. $72.94 up 0.16 for a barrel of Texas’ finest WTI. I am jesting with you, of course. Nobody can ACTUALLY guess where prices and the results of things are going to be 100% accurately, unless your name is Biff Tannen and you have recently had access to a 1980’s Delorean supercar, managed to find 1.21 gigawatts of power and went forward in time and stole “Oil almanac – every closing price in the 2020’s”. But I highly doubt that. Delorean went out of business years ago. Anywayyyyy. It has been a common theme in this commentary, and others, too, that oil prices have been remarkably, stable? this year. $78 for Brent, $73 for WTi. Thanks very much, nothing to see here, move on. The underlying factors in hand however remain very much ambiguous and since the start of the year the Red Sea disruption has really been the overarching narrative when it has come to energy security. This has been cancelled out with demand data that has come in this year so far as disappointing and a general supply/ demand balance that is yielding nothing but an excess of crude oil in a market that is still struggling to absorb it. Largely markets that aren’t oily of nature and more equitiyiyiyyy (real word) are looking at what is happening with the cost of money, and when, and if, interest rates will start to fall. Higher for longer interest rates are dragging on economies like a Chelsea football team trying to fight its way out of mid table mediocrity. So, arguably, the push of disruption in the Red Sea on one hand and higher interest rates dampening demand growth on the other seem to be cancelling each other out to some extent. Let’s see what data comes in at to see if J-Pow makes a move sooner than people think. Now, what did I do with that flux capacitor? Good day, and week to all.