Given the constant clamour from the right-on political classes which now dominate Western politics and their year of extreme power over the populace, surely it would be a given that oil, the non-politically correct raw commodity that is the bête noire of the 'do as I say, not as I do' ideology of government these days.
The furore from many politicians about man made climate change, which is giving rise to theories that climate lockdowns may be the next plan from above, added to the petulant falling out with oil producing countries over disagreement with politics and the massive drive toward renewable energy and electric cars would surely put an end to the value of oil, would it not?
If this time last year was any measure of exactly that dynamic, then certainly.
However, next week is set to demonstrate bumper performance for oil, which is quite remarkable given the current odds that are stacked against it, and what is perhaps even more remarkable is that it is the European markets in which it is set to excel.
French public sector think tank International Energy Agency has now made a much higher estimate for oil demand this year, stating in its monthly market report just two days ago that the fundamentals look decidedly stronger when compared to April when the price of oil actually went into negative value.
That's right! Last April, the oil traders would have to pay you to take a barrel away, yet here we are after all the woke political revolution, draconian lockdowns and endless soundbites from whimsical career politicians about green agendas and the old black fossil fuel is still rearing its head.
“The massive overhang in global oil inventories that built up during last year's Covid-19 demand shock is being worked off, vaccine campaigns are gathering pace and the global economy appears to be on a better footing" said the International Energy Agency which although based in France works with governments around the world.
According to the agency, world oil demand is expected to expand by 5.7m barrels a day in 2021 — an upward revision of 230,000 barrels per day with total consumption at 96.7m barrels per day. Demand declined last year by 8.7m barrels per day.
Given the plethora of electric vehicles which now adorn the streets of major cities across the West, and the move to renewable energy and nuclear power - CGN, the Chinese government owned energy giant - is building huge nuclear facilities across Essex and Somerset coastal areas in England, and France has had nuclear energy since the 1980s, everywhere else is in full swing toward renewable and sustainable energy to the extent that British and American institutional trading companies and bank trading desks are heading full swing into ESG tradeable products, ESG being trading industry jargon for greenwash.
So, why the huge projected increase in oil use? Has Vladimir Putin finally got his new ZIL 4112R limousine?
I have it on very good authority that President Putin, a shareholder in Gazprom, Rossneft and a fair few other giant oil conglomerates, will never allow electric vehicles to proliferate the highways and cities of the Motherland. He sees them as a threat to Russia's raw materials based economy and has a far greater interest in preserving his own wealth via oil export than improving the lives of the citizens from whose efforts in a non-diversified economy, he lives a life of incredible luxury.
The same applies to many other oil-dependent states, and many of them are highly populated, unlike Russia.
OPEC and allies outside of the cartel, including Russia, agreed earlier this month to increase production from May. Producers will collectively increase output by more than 2m barrels per day in the coming three months, which includes the unwinding of additional voluntary curbs by Saudi Arabia.
Commodities are rarely linked to currencies, but in non-diversified economies such as the OPEC nations and Russia, a surge in oil prices and oil usage can drive the entire nation's wealth upwards. Not the population's wealth, but the state's wealth meaning that it will cost more of the free world's euros, dollars, and yen to buy any form of fossil fuel at base level.
Thus, currency prices in the exotics may well move against the majors.
Seems like the black gold is not dead yet!
Watch out this week for the RIghtmove House Price Index which is due to be released on Sunday April 18. Houses in the UK's provinces have rocketed over recent months due to absence of stamp duty, and second home purchases have risen, taking advantage of the far lower purchase prices and high rent yields compared to London, which has stagnated due to low rent yields for investors.
Monday morning's currency market announcements begin with Japan, which announces its Capacity Utilization metrics on a month on month basis, last month's figures being an increase of 4.7%.
Will the USD be affected by the 11.30am Monday morning UK time announcement of 3-month bill auction results? Quite unlikely considering last time there was just a 0.020 increase for the quarter.
On Tuesday at 2.00am, Britain's unemployment rate for February will be announced, it is up to 5.1% compared to 5% in January, so quite stable which is remarkable given the endless lockdowns.
Wednesday's forecasts are dominated by the British Pound as Retail Price Index (RPI) metrics for March will be announced during the night.
Thursday's markets begin with the ECB Monetary Policy Statement, as well as the ECB Marginal Lending Facility metrics at 7.45am, leading to news on the USD at 8.30am about the Chicago Fed National Activity and continuing jobless claims, which last month stood at 576,000.
On Friday, manufacturing PMI results for Germany are looking to be down 0.1% compared to the previous monthly period which may affect the EUR, and the US is showing opposing results with PMI up 0.2% over last month which could result in movements in the EUR/USD pair.