Since breaking below the 200-day moving average in the middle of last month, both WTI and Brent have an air of inevitable failure each time they try to retake the most important slowest mean, and so it proved the case yesterday. Technical exhaustion coincided with what seemed a cooling of affairs as the exchange of missiles between Hezbollah and Israel, in hindsight, did not warrant the fear of impending conflict spread. There has been an opinion floating around news agencies that Iran might be satisfied with the Hezbollah missile salvo in regard to the much looked for retaliation, although the US has warned that Iran still stands ready to strike.

Staying in that stream of thinking and looking at the reasons why Iran might not indeed attack was a surprise intervention from the Supreme Leader Ayatollah Ali Khamenei. Offering up that there was no harm in engaging with its enemy, the Ayatollah seemed to open the prospect of resumed talks with the United States over Iran's nuclear program. The US State Department told AP, "if Iran wants to demonstrate seriousness or a new approach, they should stop nuclear escalations and start meaningfully cooperating with the IAEA." Probably not much change in the hiatus then, but the timing is curious not only in the context of the current Middle East strife but in how the prospectives for the White House outline the manner in which they would tackle Iran in the run up to the election. 
Still, even with the froth blown off of expanding war fear, Libya is still set to underpin the current strength in crude if the ongoing political wrangle spreads to an all-out production stoppage or even a long stint of reduced outflows from the currently shuttered fields. The reduction of Libyan deliveries into the Mediterranean area has already seen a rise in sweet/sour premiums. Brent/Dubai M1 futures has rallied over $1/barrel since Friday and by doing so is likely to see knock-on buying into other cheaper sweeter crudes such as those from West Africa. Crudes outside of the North Sea basket have now cause to be more competitive for the influence of WTI/Midland into the world's marker barrel remains a bullish one. The recent publication of inventories from the US have been met with a dismissive market reaction, but one wonders if the Crude draw in the API data overnight of 3.4mb finds emulation in the EIA/DOE numbers, the ambivalence will relent. 

That is of course if nothing untoward emerges from the NVIDIA results due later today. The tech company is a victim of its own success and nothing other than stellar results will satisfy its burgeoning followers of its share price. Reuters source Options Research and Technology Services (ORATS), which is of the opinion that pricing in options supports a possible move of 9.8% in the stock price, and as NVIDIA makes up something akin to 5% of the value of the S&P, no wonder wider markets are sitting on their hands at present. It is enough that European CPI and US PCE inflation is due on Friday, but such a move in the tech darling will have ramifications for all markets.

The UN hierarchy hates oil

Antonio Guterres, the UN Secretary-General, has long been a vociferous critic of the fossil fuel industry and is once again in the news ramping up the anti-oil rhetoric. Typecast as a left-wing advocate because of his political history as a socialist in Portuguese politics, one might have expected Mr Guterres to be at the very front of human rights issues. Yet criticism has been levelled at him for years due to his inaction in many of the abuses that world has seen in its recent history. Journalists being murdered in Saudi, children of migrants being separated from parents in the US, civilian bombings by Russia into Syria/Ukraine, torture, and worse, of Israeli hostages by Hamas and in turn Israels incessant bombing of personal military targets within Gaza’s civilians and its disregard for collateral deaths. The Secretary-General has instead chosen the topic of greenhouse gases (GHGs) and associated pollution weather changes as the avenue in which he marches against unfairness.

Last year, and after careful choreography, the UN managed to string climate and rights together in an interesting mash up of UN directives. Coming under the UN Guiding Principles (UNGP), business and human rights were linked in order that cases against corporations and even nation states were made easier as the frequency of such lawsuits had increased dramatically. The 1976 International Covenant on Civil and Political Rights (ICCPR) has had its scope expanded to include the human rights of climate change. This was exampled in a letter made public in August 2023 of from a UN working group of independent litigators to Saudi Arabia. According to the International Bar Association, the UN-appointed experts urged Saudi Aramco to clarify what it is doing to abide by human rights laws related to the climate crisis despite its pursuit of fossil fuel exploration and obligations under the Paris Agreement, the legally binding international treaty on climate change adopted in 2015.

Apart from the legal weaving, this year has seen Mr Guterres embark on a word-wide campaign armed with a fossil fuel pout. In June, after new data from the World Meteorological Organization (WMO) showed there is an 80% chance the planet will breach 1.5C (2.7F) in warming above pre-industrial times in at least one of the next five calendar years and continued higher monthly record temperatures, the Sec-Gen called fossil fuel companies ‘godfathers of climate chaos’. He too hung the negative association of ‘Big Tobacco’ on ‘Big Oil’, calling for a global ban on advertising with a rallying, “It’s ‘we, the peoples’ versus the polluters and the profiteers,” as reported in the Guardian at the time. However, there is no legal standing which means the UN cannot enforce the idea, leaving Mr Guterres to carry on in bloviated frustration. On Monday, in Tonga, during a meeting of Pacific Island leaders he warned that the average rate of sea level rise has more than doubled since the 1990s as GHG warmth is absorbed into the oceans, swelling them. “This is a crazy situation. Rising seas are a crisis entirely of humanity’s making. A crisis that will soon swell to an almost unimaginable scale, with no lifeboat to take us back to safety.”

Whether or not one aligns oneself with the language and the deportment of the UN Secretary General, or indeed disagrees altogether is becoming a moot point. Even if the sneery charges aimed at the UN of being little other than an irrelevant debating society, and that it can only find progress when it does not interfere with the interests of the 5 powerful permanent Security Council members, all of which are knee deep in the fossil fuel industry, its voice is loud. With the IEA on an anti-oil and gas warpath and a potentially fossil fuel hostile Kamala Harris in the White House, the clamour against what will be eventually dubbed ‘Big Oil’, with all the connotations grows annually. As we touched on last week, the Federal Court of New York handed the keys to litigators in pursuing cases against energy companies. The UN to a lesser degree has done something similar. We know the world is not equipped to move away from fossil fuels, but the accusatory voices of bodies such as the UN continue to grow and while there is no existential threat to the oil and gas industries at present, the future will see timely reminders of a cause that will not go away.

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