In the week since our last edition of What’s Affecting Oil Prices, Brent rose $0.24/bbl last week to average $71.62/bbl while WTI fell $0.29/bbl last week to average $63.80/bbl.
For the week ahead, we expect prices to see a lift from the Iran sanction announcement on Monday morning, with Brent averaging closer to $73/bbl this week but with upside surprise possible.
While we continue to track downside risks, markets are clearly in bull mode and a sharp correction may not be imminent. In the weeks ahead we expect higher than usual refinery maintenance in the United States to lead to crude builds, which could begin to weigh on prices.
While demand remains healthy, it is not surprising to the upside. When it comes to global supply, the Iran waiver announcement could tighten supply, but likely not as much as current market reactions suggest. Iranian oil exports are unlikely to fall completely to zero due financial sanctions alone and the removal of waivers actually raises the likelihood that the OPEC+ supply agreement is not renewed in June, adding more supply to markets.
Geopolitical: Positive
Dollar: Neutral
Trader Sentiment: Positive
Supply: Positive
Demand: Neutral
Refining Margins: Neutral
Recommended Reading
Ithaca Deal ‘Ticks All the Boxes,’ Eni’s CFO Says
2024-04-26 - Eni’s deal to acquire Ithaca Energy marks a “strategic move to significantly strengthen its presence” on the U.K. Continental Shelf and “ticks all of the boxes” for the Italian energy company.
Apollo to Buy, Take Private U.S. Silica in $1.85B Deal
2024-04-26 - Apollo will purchase U.S. Silica Holdings at a time when service companies are responding to rampant E&P consolidation by conducting their own M&A.
Deep Well Services, CNX Launch JV AutoSep Technologies
2024-04-25 - AutoSep Technologies, a joint venture between Deep Well Services and CNX Resources, will provide automated conventional flowback operations to the oil and gas industry.
EQT Sees Clear Path to $5B in Potential Divestments
2024-04-24 - EQT Corp. executives said that an April deal with Equinor has been a catalyst for talks with potential buyers as the company looks to shed debt for its Equitrans Midstream acquisition.
Matador Hoards Dry Powder for Potential M&A, Adds Delaware Acreage
2024-04-24 - Delaware-focused E&P Matador Resources is growing oil production, expanding midstream capacity, keeping debt low and hunting for M&A opportunities.