What’s Affecting Oil Prices This Week? (Dec. 28, 2020)

[Editor’s note: This report is an excerpt from the Stratas Advisors weekly Short-Term Outlook service analysis, which covers a period of eight quarters and provides monthly forecasts for crude oil, natural gas, NGL, refined products, base petrochemicals and biofuels.]

As we expected, the price of Brent crude oil closed the week lower than the previous week. The price of Brent crude oil closed at $51.29 after closing the prior week at $52.26, which was the first weekly decline since the beginning of November. The negative news about COVID-19 outweighed the optimism associated with the vaccines. The price of WTI also declined with WTI closing the week at $48.30 after closing the prior week at $49.10.

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While closing lower this week than the prior week, oil prices rebounded from the lows that were seen on Dec. 22 when the price of Brent crude fell to $49.28. Prices rebounded, in part, because of the U.S. Congress moving toward agreement on another stimulus/recovery package of some $900 billion. Another supportive factor was the drawdown in U.S. stock levels including stock levels of crude oil, gasoline and diesel fuel.

About the Author:

John E. Paise, president of Stratas Advisors, is responsible for managing the research and consulting business worldwide. Prior to joining Stratas Advisors, Paisie was a partner with PFC Energy, a strategic consultancy based in Washington, D.C., where he led a global practice focused on helping clients (including IOCs, NOC, independent oil companies and governments) to understand the future market environment and competitive landscape, set an appropriate strategic direction and implement strategic initiatives. He worked more than eight years with IBM Consulting (formerly PriceWaterhouseCoopers, PwC Consulting) as an associate partner in the strategic change practice focused on the energy sector while residing in Houston, Singapore, Beijing and London.