sunset boulevard
market vibes
April 15…)
IEA Chief Issues Stark Warning on Oil Prices: “Oil prices are set to rise further, as current futures fail to reflect the severity of supply disruptions,” he says.
The most common bullish theme in oil today is “the disconnect,” and the bull camp insists the shortage of oil is systemic and still emerging. “Just you wait,” they say. “The paper markets are wrong.” While reading the article above, I sensed a new kind of panic: Oil is not going up. Brent settled at $95 yesterday. WTI is up a dollar this morning.
Oil tankers are beginning to move through the Strait of Hormuz and according to Kpler and Reuters, 3 confirmed non-Iranian-bound commercial oil/chemical tankers have exited since the blockade started. The WTI May/June front spread is lower today than it was when the war started.
This is the May/June/July butterfly. This says glut to me because May WTI doesn’t expire (last trading day) until April 21 and may is still the dominant benchmark. API reported another (8th consecutive week) increase in inventories yesterday (up 6 million barrels). The DOE reports at 10:30 AM EDT today.
Furthermore, public interest in the Iranian conflict is in steep decline. The war itself is a news nightmare because nothing ever really changes except the price of a barrel, which is pretty ordinary. Net net gasoline is up a dollar since March 2.
Just to punctuate the intensity of propaganda surrounding petroleum prices, I will leave this chart of #2 heating oil, the most common futures benchmark for distillate prices… without comment…
The real news is going to be what becomes of Iran after the Strait is open and everyone tallies up their winnings and losses and goes home. The effort to keep prices higher might be as energetic, if not more so, than it was to suppress them. More on that in the vibe.
in the markets
