Dreams, hopes; optimism and uncertainty, they’re all poignant feelings for a lot of us at this time of year, but even more so at the moment, as we try to make sense of a year navigating the challenges associated with the COVID-19 pandemic, and look for some sort of path, hopefully positive, going forward into 2021.
It’s the 50th SIMON SAYS of the year, and of course, just by coincidence, the Brent crude oil price has joined in, passing through the same number in dollars/ Bbl for the first time since early March this year. Even in a week that saw a massive build in U.S. crude oil stocks, sentiment has kept its place at the vanguard of market direction, spurred on by the first approved coronavirus vaccine being injected into a very jovial 90 year old lady, here in the UK. Canada followed, and we await the U.S.
I woke up last Sunday to the news that two old heavyweights, clearly in need of extra money, had come out of their respective corners to put on what many were expecting to be nothing more than a short sparring match, before sitting down in front of the world’s press to explain how they were both clearly the winners. By the way, I’m not talking about Mike Tyson’s fight, come exhibition, with Roy Jones Jr! No, I’m on about the hurly-burly that’s been going on at the very core of OPEC over the last week or so, involving two of their own towering heavyweights, Saudi Arabia and the UAE.
If you happen to be short a VLGC or two in this week’s LPG market, then the saying “it’s all gone Pete Tong” may well be the fitting use of this increasingly popular cockney rhyming slang, come idiom, to describe when it goes “a bit wrong”, although what happened last week was certainly not small in any sort of magnitude. For those still not sure what the last couple of sentences mean, the slang actually dates back to 1987, when fellow DJ Paul Oakenfold used the lingo in an article about acid house music, called “Bermondsey Goes Balearic”, for the Boys Own fanzine.
The good news just keeps on rolling in, whether it’s further positive data from Pfizer/ BioNTech, the new Moderna vaccine, our very own Oxford University/ Astra Zeneca serum, which is showing very encouraging phase two test results, as well as Russia’s very own Sputnik V inoculation, that’s a great name! But as always there’s an understandable inclination for everybody to concentrate on these short-term success events, instead of getting to grips with longer term trends, and the big one of course is climate change.
Day after day, week after week, the dark news of the number of COVID-19 cases, hospital admissions, and sadly deaths, has again been accelerating, a second wave, with more lockdowns, more instability, and yet further potential consequences for global demand. And then out of the blue came the news that Pfizer and BioNTech’s test vaccine had a success rate of over 90% in cutting your chances of developing coronavirus symptoms. That’s in-line with measles and it’s streets ahead of the flu jab.
Back in 2017, Brexit’s Vote Leave boss Dominic Cummings was behind a £350 million lie, written on the side of a campaign bus, at best we might get away with calling it a mistruth. The clever strategists and media plotters had cunningly worked out that it didn’t matter whether the number was correct or not, it was more the fact that voters subliminally absorbed the basic argument, that money paid to the EU could instead be redirected to the National Health Service (NHS).
Doesn’t it feel as if everybody’s getting the jitters, and the poltergeists have certainly struck the oil market, as prices hit 5-month lows, released from their circa $40/ Bbl trap. There’s been yet more pessimistic data on COVID-19, as Western Europe heads into stricter lockdowns, led by France, Germany and now the U.K., while cases in the U.S. remain at record levels, and daily cases worldwide keep reaching new highs. Then add in the uncertainty over the U.S. Presidential election, although with only a few days to go it still appears to be a Biden victory.
Everybody’s eyes are now firmly set on what’s stirring-up in the U.S., and it’s not just Adele’s appearance on Saturday Night Live, we’ve also only got to wait just over a week to find out who won, Trump or Biden! It’s not that long ago, I believe it was February this year, when the polls were showing President Trump had just about maneuvered himself ahead, but only eight months later it’s a totally different story. Will the same reversal of destiny also apply for LPG export numbers out of the U.S.?
Same old, same old, day after day, week after week; Brent and WTI prices always seem to go up then they go down, usually ending up hovering around $40/ Bbl. Unfortunately, the only spikes appear to be in coronavirus numbers in Europe and the U.S., and by Friday night the mid-week gains in crude oil prices, mainly on the back of bullish EIA and API crude oil inventories, had been squeezed out of the market by yet more news of lockdowns in Europe’s major economies.