Brent and WTI both fell last week. Brent crude oil fell $1.93/bbl to average $63.78/bbl, while WTI crude oil fell $2.28/bbl to average $56.98/bbl. Prices lost significant support after refined product stock levels built in both the United States and the Amsterdam-Rotterdam-Antwerp hub. For the week ahead we expect Brent prices to tread water as fears about demand are partially countered by geopolitical tensions.
Tensions continue to rise in the Persian Gulf, and further developments could support prices. After mixed reports about whether or not U.S. forces shot down an Iranian drone, the Iranian Revolutionary Guard announced it had seized a British tanker in response to an Iranian tanker seized two weeks ago. The situation is still developing with British leaders in consultation about how best to respond to the provocation. This marks a distinct change in Iran’s behavior and shows that Iranian leadership is more willing than before to engage in direct confrontations.
Managed money net positioning increased for the second week in a row for WTI and also for Brent. Although fears about a global economic slowdown persist, speculators likely believe that much of this slowdown has been priced in. While prices will remain buffeted by bearish and bullish factors, the likelihood for a significant leg down is dwindling. In the weeks ahead, earnings reports from not just oil and gas companies, but also consumer-facing companies, could have an outsized impact on price expectations.
Geopolitical Unrest – Positive
Global Economy - Negative
Oil Supply – Positive
Oil Demand – Negative
How We Did
Recommended Reading
Range Resources Expecting Production Increase in 4Q Production Results
2024-02-08 - Range Resources reports settlement gains from 2020 North Louisiana asset sale.
Sinopec Brings West Sichuan Gas Field Onstream
2024-03-14 - The 100 Bcm sour gas onshore field, West Sichuan Gas Field, is expected to produce 2 Bcm per year.
TotalEnergies Restarts Gas Production at Tyra Hub in Danish North Sea
2024-03-22 - TotalEnergies said the Tyra hub will produce 5.7 MMcm of gas and 22,000 bbl/d of condensate.
Pemex GoM Oil Platform Blaze Leaves One Dead, 13 Injured
2024-04-08 - A Coter contract worker died from a fire that broke out at Pemex’s Akal-B platform this weekend that also left several others in serious condition, the company said.
TotalEnergies Acquires Eagle Ford Interest, Ups Texas NatGas Production
2024-04-08 - TotalEnergies’ 20% interest in the Eagle Ford’s Dorado Field will increase its natural gas production in Texas by 50 MMcf/d in 2024.