Oil commentary - 7 December 2020

Morning all and I hope everyone had a good weekend.  How does Santa keep track of all the fireplaces he's visited? He keeps a logbook. I mean, come on, can a week possibly get off to any better start? Let's ask the crude market. Brent is trading this morning at $49.10 down 0.15 and WTi is trading down 0.19 at $46.07. First of all, I want to mourn the passing of someone I enjoyed listening to immensely, Peter Allis, the golf commentator who died yesterday at the age of 89. For the uninitiated, Allis was known globally as "the voice of golf", and he didn't really care what he said but he was always witty and respectful. Arguably, listening to him was a massive inspiration for this commentary. My favourite Allis quote of all time when talking about the weather in Scotland, "One of the good things about rain in Scotland is that most of it ends up as scotch." Right, let's talk oil. So an agreement was thrashed out by OPEC+ in front for all to see that the much anticipated deferment of 2mn bbls of production wasn't agreed on and instead we will see 500,000 bbls per day return each month (subject to a jolly good disciplinary hearing for all those who don't fall in to line). Is this bullish? I mean, no, not really. On one hand you can argue that the group did come together to show unity that they can do what is needed, when it is needed. But is there a shift in the outlook regarding the strength of OPEC+? This is a rhetorical question and one we will only find out the answers to as the adherence to agreed production by each member state is reviewed. Brent is trading dangerously close to $50 and it's not on the back of OPEC+, not really, just on the back of how money is piling in to all things oil in the hope that demand will pick back up sooner rather than later. And this is the issue, the fracture that global growth is showing us, Asia is doing well but the USA and Europe seem to be struggling with further lockdowns. Keep your eyes on cases. Good day, and week to all.