The return of an old enemy

In mid-December we asked how long can WTI backwardation last? The New Year has provided us with the answer. Front-month WTI had been in backwardation since last August with only a brief hiatus in October and part of November. Now though, the prompt spread has shifted into contango having trended lower since the start of [...]

2020-01-24T09:51:28+00:00January 24th, 2020|

The middle of the barrel

Supply issues are irrelevant at the moment. The chairman of the Libyan National Oil Corporation suggested that his country’s production has already fallen to 400,000 bpd from well above 1 mbpd and will plummet to 72,000 bpd soon unless the blockade of its pipelines and export terminals by forces loyal to General Khalifa Haftar are [...]

2020-01-23T13:21:00+00:00January 23rd, 2020|

Virus season

These are spooky times for investors. Indeed, the fear factor has struck the risk-asset complex following an outbreak of a deadly and contagious virus in China. Several hundred people have contracted the coronavirus and worries are rife that it will spread ahead of the upcoming Lunar New Year holidays. Meanwhile, the first reported case of [...]

2020-01-22T11:36:07+00:00January 22nd, 2020|

Risk premium is AWOL

The oil market has been admirably relaxed about perceived or actual supply disruptions. There has been a pattern developing on geopolitical risk premium over the past year. The latest chapter was opened over the weekend in Libya when pipeline blockades forced the National Oil Corporation to declare force majeure on the El Sharara and El [...]

2020-01-21T09:41:11+00:00January 21st, 2020|

Signed, Sealed, now Deliver

Trade deals are like London buses. You wait for ages then two come along quicker than you can say get Megxit done. Last week, the US and China finally inked their long-awaited Phase 1 trade deal. A day later, the US Senate passed a revamped NAFTA trade accord. This double-whammy of trade agreements helped defuse [...]

2020-01-20T09:56:33+00:00January 20th, 2020|

Not so happy new year

So, OPEC and the EIA have finally joined the bearish bandwagon. While it is a case of better late than never for these two stragglers, the IEA stayed true to its long-time doom-mongering nature. Put simply, it reiterated what it has been saying for the past few months – that the oil market will see [...]

2020-01-17T10:30:24+00:00January 17th, 2020|

China to the rescue

On balance, it was a spirited performance. Market players had to deal with a downbeat supply-demand data from OPEC in the morning that followed an equally disheartening EIA forecast from the day before. The regular weekly EIA report on US oil stocks also disappointed. The three main factors that impacts stocks are refinery runs, export/import [...]

2020-01-16T09:31:39+00:00January 16th, 2020|

All change at the top

At long last, I hear you say! After a more than yearlong dispute, the US and China are on the verge of putting pen to paper to a long-awaited interim trade deal. Though the breakthrough is already baked into sentiment, it still marks a victory for the global economy. In a similar vein, it should [...]

2020-01-15T11:42:15+00:00January 15th, 2020|