At the beginning of last week Stratas Advisors forecast that the price of Brent crude would continue to be under pressure and would fall toward $41.50, but it would stabilize in the latter part of the week. The forecast was based on our expectations that oil traders’ sentiment was continuing to be more bearish coupled with crude supply remaining strong while demand growth was lagging with inventories increasing across the value chain.
For another week the firm’s forecast aligned closely with the actual price movement. The price of Brent crude started the week at $42.46 then fell to $41.80 on Tuesday before rebounding to close the week at $44.27.
Unlike the previous week, the price of Brent crude received a boost from the inventory report from the Energy Information Agency (EIA). The report indicated that while crude inventories increased by 1.22 million barrels, gasoline inventories decreased by 3.26 million barrels.
Stratas Advisors also forecasted that the Brent-WTI differential would trade between 50 cents and $1.25 with respect to the October contract. In actuality, the Brent-WTI differential started the week at 86 cents then increased through the week to close the week at $1.70 with the differential widening because of the larger rebound in the price of Brent crude.
For the upcoming week we are expecting that the price of Brent crude oil will move sideways this week and will trade between $43.50 and $45.50. We are also expecting that the Brent-WTI differential will trade between $1.25 and $2.00 with respect to the October contract.
In the this video, Stratas Advisors’ executive vice president, John Paisie explains the factors affecting oil prices for the upcoming week.
For more explanation, visit StratasAdvisors.com
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