With Joe Biden set to begin his first State of the Union address any second, it is only appropriate that WTI oil has exploded higher, and just printed at an 8 year high of 108.63, rising more than $3 since the cash market close, and more than $10 in the past 24 hours!
At the same time, Brent which traditionally trades at a premium, just hit $110:.*BRENT CRUDE OIL EXTENDS RALLY ABOVE $110 A BARREL. One reason for that is a rather grim assessment from Goldman which echoes what we said earlier, namely that today's IEA release of 60 million barrels of emergency oil reserves will do exactly nothing to halt oil's tremendous surge higher.
As Goldman's Damien Courvalin writes, writing about the release of 60 mb of emergency oil reserves following Russia's invasion of Ukraine "We do not view this as sufficient relief, representing an only 1-month offset to a potential disruption to one-third of Russia's 6 mb/d seaborne oil export flows, for example, consistent with the rally in prices after today's announcement."
Courvalin writes that a short-term deescalation or a potentially faster ramp-up in OPEC+ production would also not derail the bank's view for structurally higher prices, with Dec-23 Brent $24/bbl below our forecast; "Similarly, we do not expect a large price sell-off should an agreement with Iran be reached soon. Case in point, the global oil deficit in February is turning out to be twice as large as our above-consensus forecast while Iraq is experiencing 0.5 mb/d of outages, enough - if sustained and combined - to fully nullify Iran's potential return to the global oil market."
The silver lining, is that at least one person is delighted by this tremendous ascent in oil prices: Jerome Powell.
As we said almost a month ago, the quickest and safest way to "Burn out" inflation is to send oil to $200... triggering a global recession if not depression.
If Powell really wants to burn out inflation, he should send oil to $200+.
It's becoming increasingly difficult to discern fact from fiction, and unfortunately the media has a strong bias. They spin stories to make conservatives look bad and will go to great lengths to avoid reporting on the good that comes from conservative policies. There are a few shining lights in the media landscape-brave conservative outlets that report the truth and offer a different perspective. We must support conservative outlets like this one and ensure that our voices are heard.
Wednesday, March 2, 2022
Oil Hits $110 As Biden Begins SOTU Address; Goldman Says Emergency Oil Release Won't Do Jack
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