In the week since our last edition of What’s Affecting Oil Prices, Brent pulled back from the brink of $70 to average $68.61/bbl.
For the upcoming week, Stratas Advisors expect Brent prices to average $68.50/bbl as trading activity picks up and the market remains quiet at the start of the week. This week Stratas analysts expect the West Texas Intermediate-Brent differential to average $5.50/bbl.
Geopolitical: Neutral
Geopolitics will be a neutral factor in the week ahead. The restart of production from Libya will offset comments from Saudi Arabia’s energy minister Khalid al-Falih indicated on Jan. 21 that OPEC members are likely to cooperate in some form past 2018. This is not likely to come as a surprise.
Dollar: Neutral
The dollar will be a neutral factor next week as crude oil remains more influenced by fundamental factors and sentiment.
Trader Sentiment: Positive
Trader sentiment will be a positive factor in the week ahead with net positioning near record highs. RSI hovers near overbought territory as it has since end-December, raising the possibility of a price correction, likely triggered by a negative weekly U.S. inventory report.
Supply: Neutral
New supply from Libya is offset by a fall of five oil-directed rigs in the U.S. Though this fall is likely weather-related, Stratas Advisors see supply as neutral this week.
Demand: neutral
Demand was a mixed bag last week as wild weather continues to move through much of the country. While there could be a surprise this week from the EIA, we consider it a neutral factor.
Refining: Neutral
Refining margins continue to fall but rebounded this week. While we are concerned about the longer term impacts of refinery margins compression, this is offset by some short-term increase.
Recommended Reading
Marketed: BKV Chelsea 214 Well Package in Marcellus Shale
2024-04-18 - BKV Chelsea has retained EnergyNet for the sale of a 214 non-operated well package in Bradford, Lycoming, Sullivan, Susquehanna, Tioga and Wyoming counties, Pennsylvania.
Triangle Energy, JV Set to Drill in North Perth Basin
2024-04-18 - The Booth-1 prospect is planned to be the first well in the joint venture’s —Triangle Energy, Strike Energy and New Zealand Oil and Gas — upcoming drilling campaign.
PGS, TGS Merger Clears Norwegian Authorities, UK Still Reviewing
2024-04-17 - Energy data companies PGS and TGS said their merger has received approval by Norwegian authorities and remains under review by the U.K. Competition Market Authority.
Energy Systems Group, PacificWest Solutions to Merge
2024-04-17 - Energy Systems Group and PacificWest Solutions are expanding their infrastructure and energy services offerings with the merger of the two companies.
Chevron, Exxon in Dispute Over Hess Stake in Guyana Oil Block
2024-02-27 - Chevron’s $53 billion deal to buy Hess’ interests in the Stabroek Block offshore Guyana could be derailed as Exxon, CNOOC say they have first rights of refusal on the block’s interests.