“”

@AlaliQasem The markets are controlling the markets. When is the last time you looked at brent DFL’s or CFD’s Einstein? 2 weeks ago?????? You need a different brand of tea cuz yours seems to be opiated.

🚨 Saudi Finance Minister EXPOSES the oil price : “You see $90 on the screen… good luck buying a barrel at that price.” Real price? $120–$160/barrel. The biggest gap between perception and reality in energy markets — ever. Who’s controlling the narrative? 👀

@JavierBlas And worldscale (an explicit percentage on flat rates) has fallen from ws 900 to 600 on some routes. Its called MATH. Even John Rockefeller understood “wet” prices vs benchmarks 100 YEARS ago. Its called “freight.” EU cutting cdu rates as well. Shocker…NOT.

It turns out that oil financial and physical markets do converge -- just not in the way that many were expecting. Dated Brent is now below $100 a barrel (from $145 last week), and physical differentials in the key pricing window have plunged >$10 from a few days ago.

@ericnuttall @staunovo Oh will you please stop it with this ship distance melodrama drivel already? 1-AG/Sing is 11.6 days; u r off by only 2 weeks each way. U r on cnbc nonstop so know your s*^>t first. 2- IEA is as useless as the UN in accuracy. Traders know this. Close ur losses and give up. 🤣

A few thoughts with oil down 11% on the SoH being "opened" (until April 22nd): 🛢️voyage time for tankers out is ~25 days to Asia and 25 days back = ~ 2 months of continued production loss = ~600MM Bbls = still heading to lowest inventory levels in history 🛢️IEA yesterday saying will take ~ 2 years to fully normalize production 🛢️80 facilities have been damaged, 1/3 "severely or very severely" which will take quarters/years to fix 🛢️political risk premium of $10+/bbl likely and the floor price for oil is now higher given inventory reset 🛢️SPR restocking will = ~0.3MM Bbl/d of new demand for the next 4 years 🛢️oil equities were on average discounting $70WTI. Won't matter at the open but will again soon.

@JavierBlas @staunovo Crude unit rate cuts in Euromed. Simple. Also amplifies jet and ulsd strength. More windmills necessary for cooling season. Enjoy 🍿

The North Sea physical oil market continues to show signs of stabilising, with Dated Brent slightly weaker; physical premia coming further down, and offers dominating in the key trading window. Of course, all could change. Meanwhile, the paper Brent market went up ->4% today.

@GasBuddyGuy You don’t say? Thank you Captain Obvious.

the US is now feeding the global demand for oil and refined products (gasoline, diesel, jet fuel) at RECORD pace

@JavierBlas Obvious from the very start which is why any tanker operator with a room temp IQ will not fix voyages out of the usgc-caribs without the charterer paying full ballast back. Its called a load zone for a reason. Every region outside of this are takers and pad 3-cbs is the only 1

CHART OF THE DAY: The barrel of last resort. US total crude oil and refined petroleum products have surged to an all-time high of >12.7 million b/d. (And further highs are likely over the next few weeks as everyone turns to America amid the blockade in the Strait of Hormuz)

@DerrickEvans4WV $4 per gallon is cheap. Find a brain cell pls

Can someone please explain to me how we have all this extra oil to sell to other countries, but gas is over $4/gallon here as if there’s some sort of shortage.

@JenGriffinFNC Now you are John Rockefeller eh? Demand destruction will and SHOULD continue; its natural econs and should occur with those most exposed; Asia (dependence on AG crudes due to DISTANCE from AG to Asia-short) and Euromed (moronic energy policies killing production hence firewood)

“Oil demand is expected to contract by 80 kb/d this year, as the Iran war upends our global outlook. This is 730 kb/d less than in last month’s Report and a forecast 1.5 mb/d 2Q26 decline would be the sharpest since Covid-19 slashed fuel consumption. Initially, the deepest cuts in oil use have come in the Middle East and Asia Pacific, mainly for naphtha, LPG and jet fuel. However, demand destruction will spread as scarcity and higher prices persist.” iea.org/reports/oil-ma…

@TomKloza You really must need followers with this. So many words; ugh. Traders are not flummoxed. They are making bank. Drama aside wet vs futures is (1) freight and (2) exposure to PG crudes. Asia and Euromed mkts are screwed. Simple math. Oil does not move on magic carpets.

The Spring of Disconnect – An Update and Explanation April 14 - Nothing has flummoxed the oil trading community this spring like the disconnect between the very high physical prices and the much lower futures’ contracts. Normally only a few dollars per barrel separate futures from cash numbers or the OSPs - Official Sales Prices - - of OPEC countries like Saudi Arabia and Kuwait. More recently, we’ve seen Saudi Arabia and Kuwait issue OSPs that have been $17-$23/barrel above the price benchmarks that you hear about and see referenced in TV every day. Instead of indistinguishable prices in a narrow range, the market has generated gaps that rival some of the absolute crude values of 2020 and 2021. One of the most sobering examples occurred yesterday when a buyer paid nearly $149/barrel for physical crude in the North Sea, while June Brent futures’ quotes languished around $99/barrel. The near-$50/barrel difference begs the question: which assessment more accurately reflects the current worth of crude oil? A $99/barrel Brent price is suggestive of US gasoline prices in the $4.15-$4.35/gal range. A $149/barrel price evokes fears of gasoline pricing well above $5/gallon. Indeed, time really is money. It’s important to understand the pricing reference hierarchy under these circumstances. What follows is an attempt to explain the various numbers, and parties that may be responsible for generating the references which are embedded in global markets. We’ll start with the Brent futures’ contract. ICE Brent futures see billions of dollars of oil trade every business day and one needs to recognize that this is a “paper” market utilized for hedging, investment, and speculation. Contracts are financially settled with no intention of physical delivery. The June contract expires on the last business day of April, which this year falls on Thursday, April 30. On Friday, May 1, the front month will switch to the July contract, even though that reflects circumstances approximately 61 days in the future. Dated Brent crude, as assessed by S&P Global Platts, is a measurement of what the physical price for a variety of appropriate crude prices fetch for specific loading dates, typically 10-30 days in the future. A basket of five North Sea crude oil grades—Brent, Forties, Oseberg, Ekofisk, and Troll—are the likely candidates for assessment. or for global crude oil. In June 2023, WTI crude from Midland, Texas was incorporated into the Dated Brent benchmark with prices listed on a CIF Rotterdam (delivered value incorporating cost, insurance, and freight) in the benchmark. The price difference between WTI and Brent must be wide enough to overcome the incredibly high freight rates that have resulted from the Strait of Hormuz closure bottling up over 300 tankers. Pricing might be complex enough if this were the end of the process. But each business day, various parties can offer to purchase or sell in the Platts’ window, which is a 30-minute period at the end of the trading day. Bids, offers and transactions occur during this 30-minute time period, and Platts then determines the fair market value for the price of a physical cargo. This price is the Dated Brent Price representing the value of a physical cargo of North Sea or WTI crude for delivery in the next 10 to 30 days. Other physical cargoes of crude oil may then be priced at a premium or discount to this Dated Brent price. Since the Iran War began, numerous sessions have seen an absence of sellers, suggestin that near-term physical supply is tight or perhaps questionable. Earlier this week, the arithmetic was approximately as follows: June Brent - $99/barrel Dated Brent - $124/barrel Physical Oil - $149/barrel Hence, the numbers clearly show the tight prompt physical cargo availability, while the futures’ quotes may reflect expectations of a resolution to the conflict, which would lead to lower prices. What happens now that we see some $50/barrel separating the near-term physical oil assessments and the paper price assessment that expires on April 30 (June Brent)? Despite the incongruent nature of the numbers and the huge differences tied to timing, nearly all parties agree that there should be convergence. If physical prices and Dated Brent prices remain at say $130-$150/barrel, the price of June Brent should rise to more closely approximate the physical market. Or, alternatively, the physical price and the Dated Brent price should ease and more closely approach the June Brent futures’ contract. There is of course the chance that Brent futures rise and physical prices ease. One might make a reasonable case for a physical price of $123/barrel which would represent the approximate halfway point between the futures and physical value this week. Complicating matters will be the backdrop of physical oil needs and presidential rhetoric. Millions of barrels of oil loadings were lost when the Iran War began on February 28. Those barrels take as long as 40 days to move to Northwest European destinations, so gaps in supply might theoretically be forthcoming through the remainder of April. On the other hand, progress in reopening the Strait and prospects for a negotiated settlement tend to impact futures much more than physical markets. It is much easier for Presidential rhetoric to exert influence on June futures than on the physical market for late April and early May. Whatever the solution, recognize that this has never been seen in the oil pricing world before. The backwardation between the mid-April physical price and the price of oil exiting 2026 is $81.50/bbl is approximately $70/barrel. We’ve seen similar backwardation in US Gulf Coast gasoline prices after hurricanes and California gasoline and diesel seemingly always operate in a severely backwardated world. - Tom Kloza, tkloza@klozaadvisorsllc.com

@US_OGA And they shall be wrong yet again with Iran

It took less than six weeks to prove the Chattering DC Lanyard Class wrong - again. Actually five. Five weeks. Five weeks from the first weekend when it all started to when crews arrived to start rebuilding the infrastructure left behind when Chavez and his little toadie Maduro -kicked everyone out. We should dig up all those old posts from the beautiful people of DC and refresh everyone's memory about how wrong they were - again.

@HFI_Research And all an actual and REAL oil trader “can say” is that the “detach” that you keep harping on about between Oman, Forties, and the like is FREIGHT. THAT is the “whatever the fuck” is the difference Einstein so wake the eff up and quit pimping your book. More ships empty, LOWER!

I think the sell-side community will have an incredibly hard time coming up with an oil price to offset an 11 to 13 million b/d supply outage. We tried. Zero confidence in the result. But all I can say is that it's not $99 or whatever the fuck Brent is currently trading at.

@TomKloza The States is not in the north sea. You know this. Get real.

Those folks trying to predict spring gasoline prices, take notice. When crude is around $99/barrel (where it is in futures markets today), gasoline retail hangs from $4.20-$4.45/gal. If crude is around $149/barrel (the price paid in North Sea today, the price is above $5/gal.

@JenGriffinFNC And you expected him to say “here we come?” Hard to believe you are Fox’ chief correspondent Captain Obvious

Remember the two week ceasefire is in effect until April 21. VP Vance said nothing last night about an end to the ceasefire.

@GasBuddyGuy Yes and then it will fall just as it did during Iraq after James Baker made his announcement. It fell like a prom dress and the $18 drop is going to look like a dress rehearsal once Kharg is taken and the $ stops. No $ no drones.

welp, oil, gasoline and diesel aren’t likely to decline but will keep climbing…

@DrDavidKass Former natgas moron from a defunct gas company. Couldn’t advise Unicef much less energy and knows zero about oil. Another infrastructure word salad thrower like Blinken.

Former White House Advisor Amos Hochstein on CNBC: Recommends international effort to construct infrastructure to provide alternate route for oil from Middle East, but it is very expensive and may take a decade to achieve. Iran is violating ceasefire by closing the Strait of Hormuz.

@dr_duchesne @nfergus Impose Neocon views on opening up an international waterway? Are you opiated? How about allowing free commerce through an intl waterway or gee is that too “Neocon” for you meatheads? This is not Iran’s personal toll booth so some opine to finish this off once and for all

@nfergus Yet another Neocon plan based on the Anglo-Israelite illusion that the West should impose Neocon values onto the world while it imports millions of immigrants with dramatically different cultures -- a completely irrational worldview.

Iran's control of the Strait of Hormuz cannot stand. But there's no going back to the status quo ante in the Gulf. The U.S. and its allies urgently need a plan for the post-war governance of the Strait of Hormuz. Here's a proposal by me, @RichardHaass, and Philip Zelikow.

@nfergus Paywalled. Not a chance

@JenGriffinFNC Pakistani/Iranian “diplomacy?” Are you not better than that Jennifer? Seriously. Would expect more from a “seasoned veteran” reporter than buying into this charade. Give us a break.

And so it begins. This from Pakistan's Prime Minister about ceasefire violations.

@marketplunger1 FCF? You are a complete moron. There is no unit with this designation. Good lord how do people like you exist?

Oil is back to a price where companies are making only 35%+ FCF yields. What a travesty.

@OilCoIntern Good luck with George Custard Trading…..

@DasCaliTex Are you referencing yesterday’s drop? My answer hasn’t changed in the slightest.

Every day the Iran War drags on, the floor price of oil marches relentlessly higher. Ship traffic through Hormuz is now ~10% of pre war levels, but I am seeing many headlines toting “highest levels since the beginning of the conflict.” Those rosy takes are reinforced by daily jawboning about things like “45-day ceasefires.” While that 10% traffic number is mathematically correct, it could be 50% of pre war levels and it still wouldn’t mean all that much. Tankers are striking deals with Iran to get through. This is not a long-term solution. Saudi Arabia, UAE, Kuwait, Qatar, the U.S., Europe, Japan, and South Korea will never accept Iran deciding who sails and how much they pay. Their economies depend on open, predictable passage. Iran controlling global oil flow long-term is not happening. It is becoming more likely that we realize hypothesized scenarios like @Rory_Johnston illustrated below.