Welcome to leap year 2018! Ok, I know what you are thinking, you have not heard that it's a leap year. Well, 2018 is not a traditional leap year, but it will be a leap year for crude. Oil struggled this year as the market failed to be convinced that the combination of OPEC and Non-OPEC production cuts and strong global demand could reduce global supply.
What good is it for someone to gain a pipeline, yet lose another? The Forties pipeline is coming back but a loss of a Libyan oil pipeline has the oil bears in a less than festive mood. WTI crude oil hit $60 a barrel yesterday for the first time in 2-and-a-half years and Brent crude hit over $67 a barrel on reports that armed men blew up a pipeline pumping crude oil to Es Sider port on, cutting Libya’s output by up to 100,000 barrels per day.
So much for global warming! Winter is back, and back with a frosty reminder that it can still get cold. Really cold. It's the first real blast of winter in a very long time and the market is trying to get a feel for how that may effect supply.
The forties is down till Christmas, in the old North Sea, it will slow that oil flows into Scotland’s refineries. Christmas will find price hikes, all the way downstream. The forties is down until Christmas and the oil price will scream.
There is a temptation to attribute the recent rise in oil prices to just the uncertainty of the political purge that we have seen in Saudi Arabia, but if you think that you are missing the larger point.
It seems the move by Saudi Arabia’s Crown Prince Mohammed bin Salman to arrest members of the royal family and their business associates in a corruption crackdown is proving to be wildly popular among the Saudis young population.