Please note that today we only have time for a flash-blog – normal service resumes next week
The oil prices continued their upwards bounce overnight, with Brent closing at US$34.46 (up 5%) and WTI at US$33.73 (also up 5%). The closing price was actually a retrace on much higher prices that were hit during the day.
And the reason for this? Further incoherent and confusing statements from Russian officials (but not the only one who really counts – perhaps he was stroking white cat and saying “we did not expect you Mr Bond – here, please have a lovely cup of tea”) about the potential for coordinating cuts with OPEC.
In our view the bounce in recent days feels very feline and very dead.
One unofficial comment from a Russian source that actually works in the oil industry seemed to affirm our view that there is no shiny oil production dial waiting to be turned in the Kremlin:
“It is impossible to coordinate the process and stop production in Russia.”
Henry Hub closed up 3% at US2.22.
Quote of the day
The one group that is actually doing the most to hold up oil prices just now is ISIS in Libya. If that country’s greater than 1 mmbopd of shut in production was back on line then predictions of sub-US$20/bbl oil could well be borne out. The strategy of the black-flag waving morons is summarised by the head of the Libyan NOC as:
“They are not trying to occupy oil facilities, only to disable them. Their attacks have been very targeted, and they have managed to achieve a considerable level of damage with very few people. We should expect more such attacks.”