8 October 2024: 16:30 BST
The Big Barf in progress. Poor longs, they got overextended and the bears made minced meat out of them. We were well into the $79 range with Brent flat price, then America woke up, said ‘that’s too high’ and sent the flat price tumbling. It got thrown down the staircase, bouncing down further into the 70s. From $79.41/bbl at 14:05 BST, it fell to under $78/bbl by 14:53 BST. Optimism over China’s monetary policies combined with fears that Israel’s retaliation could unhinge a wall of fire on the Strait of Hormuz and threaten the supply of over 20 million b/d day made for a very fetching bullish story. But traders always get overextended, don’t they? And then scepticism grew over Israel’s abilities and China’s rebound. And then prices fell, eliminating a portion of the risk premium. Brent touched $78/bbl and despite some temporary support, it took another massive dump all the way down to $77.00/bbl and has been hovering above this mark. More to come? Certainly; it broke through $77/bbl just before the window and closed at $77.08/bbl. Hope the longs brought their barf bags. It’ll be tricky to keep breakfast or dinner down in such turbulent conditions.
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