Despite pronounced weakness at the end of the week, Brent and WTI traded generally sideways last week. Brent fell $0.20/bbl to average $73.65/bbl while WTI was flat on an average basis, despite a volatile week. While the recovery is far from complete, the Brent-WTI differential has widened slightly over the past several weeks, a trend we expect to continue as Suncor (NYSE: SU) continues to bring back online its damaged Syncrude facility. We expect Brent to average $74.50/bbl in the week ahead.
A slew of U.S. sanctions again Iran come back into full effect today, although many of the primary energy related sanctions will not be officially back in place until November. Despite the later deadline, many refiners are already sourcing crude from alternate suppliers. South Korea remains a potentially significant opportunity for American crude exports. This week could see further rhetoric from Iran about lost oil supplies, and OPEC not being responsible for filling the supply gap.
Visible weekly product stocks remain generally at or below five-year averages, a boon for crude demand and margins. Strong runs will continue through the summer, supporting prices. While concerns around the economic impact of tariffs are valid, the physical impact of these tariffs on fuel will likely not be felt for several months.
Geopolitical: Neutral
Geopolitics will be a neutral factor in the week ahead although with some U.S. sanctions against Iran being officially reinstated, both sides could exchange fiery rhetoric.
Dollar: Neutral
The dollar will be a neutral factor in the week ahead as fundamental and sentiment-related drivers continue to have more impact on crude oil prices.
Trader Sentiment: Neutral
Trader sentiment will be a neutral factor in the week ahead after markets were generally pleased with earnings results and future spending plans.
Supply: Positive
Supply will be a positive factor in the week ahead. A slew of U.S. sanctions again Iran come back into full effect today, although many of the primary energy related sanctions will not be officially back in place until November. Despite the later deadline, many refiners are already sourcing crude from alternate suppliers.
Demand: Positive
Demand will be a positive factor in the week ahead. Visible weekly product stocks remain generally at or below five-year averages, a boon for crude demand and margins. Strong runs will continue through the summer, supporting prices. While concerns around the economic impact of tariffs are valid, the physical impact of these tariffs on fuel will likely not be felt for several months.
Refining: Positive
Refining will be a positive factor in the week ahead, supported by strong product demand.
Recommended Reading
Baker Hughes Eases the Pain of Intervention from Artificial Lift
2024-10-11 - To lessen the “pain of intervention” during artificial lift, Baker Hughes’ Primera and InjectRT services take an innovative approach to address industry challenges.
US Drillers Add Oil, Gas Rigs for First Time in Four Weeks
2024-10-11 - The oil and gas rig count rose by one to 586 in the week to Oct. 11. Baker Hughes said the total count was still down 36 rigs or 6% from this time last year.
EY: How AI Can Transform Subsurface Operations
2024-10-10 - The inherent complexity of subsurface data and the need to make swift decisions demands a tailored approach.
Atlas Commissions 42-mile Dune Express Conveyor, Lowers 3Q Guidance
2024-10-10 - Atlas Energy Solutions said its Dune Express proppant conveyor remains on time and on budget, but the company expects lower revenue and EBITDA for the third quarter.
Baker Hughes Lands Company’s Largest Compressor Line Order
2024-10-10 - Baker Hughes’ project includes 10 integrated compressor line units that will be installed at the Margham Gas storage facility in Dubai, United Arab Emirates.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.