00:00We still see prices in the 90s for WTI and Brent crude, but it looks like, if you take a
00:08gander at CT on the Bloomberg terminal,
00:11that those prices will come down relatively shortly. How does the futures curve look to you?
00:19Well, the futures curve, I should say, Matt, is not a prediction of futures prices.
00:23It's just a measure of the value of oil in one month compared to future months.
00:29I do think what the current futures prices are telling us is that the market does expect some sort of
00:35resolution to the conflict in the Middle East
00:37and some expectation that the Strait of Hormuz will reopen and the energy market globally can begin the long process
00:47of going back to normal.
00:48If the strait were to remain closed, I think it's fair to say that most people say that futures prices
00:53should be higher than this.
00:54And as we've discussed before, Matt, if you look at the prices people are paying day to day for physical
01:00cargoes of crude oil,
01:01physical cargoes of jet fuel and diesel around the world, that suggests that actually there is quite a lot of
01:07pain and distress in physical oil markets right now.
01:11So the market is really bought into this idea that there are going to be more talks, that there's going
01:16to be some resolution to this conflict.
01:18Has that spread come down, Will? I'm looking at dated Brent on my Bloomberg terminal, $116, $117 a barrel.
01:28That's only 20 more than Brent futures for June delivery right now.
01:33And I feel like it was more like 30 or 40 over the past couple of weeks.
01:37Yeah, that's right. And you're going to see things happen in either direction.
01:43Either those physical dated prices are going to come down and converge on the futures prices,
01:48which is basically the value a couple of months from now, or it's going to go in the other direction.
01:53So you're starting to see that happen on expectations that we're reaching the end game.
02:00But it could all change very quickly.
02:03And it's worth people bearing in mind that we still have all these ships, many, many ships stuck inside the
02:08Persian Gulf,
02:09many ships unable to get in.
02:11And there are oil fields, oil refineries in the Middle East that have been shut down by this war and
02:18have not restarted yet.
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