OIL CLOWNSHOES LOWER AFTER IRAQI-UAE MINISTERS OFFERS UP MORE SUPPLY

Yesterday there were reports the House of Saud didn’t pick up the phone when Biden gave a ring for more oil — because there was nothing to be done. Today, suddenly, the UAE and Iraqi ministers offered up more crude and the price of WTI and Brent have collapsed in kind.

• *OIL SUPPLY AND DEMAND ARE BALANCED: IRAQ MINISTER
• *THERE’S NO SHORTAGE IN OIL MARKETS: IRAQ MINISTER
• *IRAQ PRODUCING 4.4M B/D OF OIL: MINISTER
  *IRAQ HAS ABOUT 6% OF PRODUCTION AS SPARE CAPACITY: MINISTER
  *IRAQ CAN INCREASE OUTPUT IF OPEC+ REQUIRES: MINISTER
• BLINKEN SAYS UAE IS GIVING SUPPORT FOR INCREASED OIL PRODUCTION
• UK’S FOREIGN MINISTER TRUSS: WE WOULD LIKE TO SEE A COMPLETE AND IMMEDIATE BAN, AS WELL AS THE G7 DISCONTINUING ITS USE OF RUSSIAN OIL AND GAS.
• UAE TO CALL ON OPEC+ TO INCREASE OIL PRODUCTION: FT

At the moment WTI is -11.3%, off the lows of -16% to $109. The complex was rallying intra day, got back up to $119-120 and now we are seeing hot money flee en masse due to a potential OPEC increase in supply.

Markets love this shit and the NASDAQ is +444 while the German DAX closed higher by 7.9%. The war trade is being unwound and you really have to place a lot of faith on several things here for things to go ‘back to normal.’

1. Russia and Ukraine agree on terms and end the war.
2. Russian oil off the market isn’t missed. They are the largest producer in the world.
3. Ancillary effects of canceling an entire nation of 140m people incurs a negative feedback loop.

My sense is people are being far too optimistic here and that’s okay for a trade — classic Wall Street bullshit. This rally can last for the balance of the week, or based off 1 bad headline can end by the close.