Oil gave back most of its gains today as the bond market signals that something is awry.
The EU is struggling to get Poland to sign onto the agreement and they set a 'deadline' for earlier today. As like all EU 'deadlines' it came and went without any news, something I warned about. Now we find out that discussions can go another day.
There seems to be a compromise in the works where the EU puts more sanctions on Russia, including more banks, in exchange for Poland playing along and setting the cap at $60.
What I find interesting is that US officials say the cap will have a two-month review feature but I can see problems coming. Let's say oil runs to $110 and the cap is well into the money. The problem is that you get Russia oil cutoffs there, so prices go even higher. Then it works in the opposite direction on the way down, as more oil comes in once the cap is hiked.
It's a clumsy idea, at best.
As for the oil market, we found out yesterday that US demand in September was above 2019 levels in a big upward revision to what the weekly numbers were showing. The EIA has done something of a Mea Culpa and said it will try to fix its data.
