Brent fell $1.19/bbl to average $70.54 last week while WTI fell $1.12/bbl to average $61.84/bbl. For the week ahead we expect Brent and WTI to be range-bound with Brent averaging $70/bbl.
Stock markets largely shook off President Trump increasing tariffs on China after China agreed to continue trade negotiations. However, with no substantive progress made by the end of the day Friday increased tariffs have taken effect. Oil markets remain cautious but were pressured by concerns about overall economic health if the trade wars drags on.
Hedge funds took divergent positions on Brent and WTI last week, in an indication that supply was of greater concern than future demand. In the US, funds remain concerned about the pace of U.S. shale growth, with recent weekly data indicating a fresh high. Internationally however, a medley of issues continue to threaten volumes. The weeks ahead are likely to see similar positioning trends as tensions mount around Iran and Venezuela. At the same time, refiners are returning from maintenance in the US. If crude runs increase and crude stocks continue to build, markets will quickly turn bearish.
Global Economy: Neutral
Oil Supply: Neutral
Recommended Reading
Oil Prices Jump 4% on Reports of Iran Preparing to Attack Israel
2024-10-01 - An Israeli attack on Iranian oil production or export facilities could cause a material disruption, potentially more than a 1 MMbbl/d.
EQT Plans to Reverse Some US Natgas Production Curtailments in Oct, CEO Says
2024-09-25 - EQT, the biggest U.S. natural gas producer, has along with other U.S. drillers curtailed output in 2024 after prices collapsed to multi-year lows in the spring following a mild winter that left a tremendous oversupply of fuel in storage.
Oil Falls as Swelling US Supply Counters Middle East and Hurricane Risks
2024-10-09 - Oil fell on rising U.S. crude inventories but the risk of supply disruption from the Middle East and Hurricane Milton curbed price declines.
Kissler: How Long Will Geopolitical Unrest Support Crude Prices?
2024-10-10 - Slower global economic growth pulls prices in the opposite direction even as oil prices were up about 4% on Oct. 10 due to factors including risks to Middle East supply.
Geopolitical Tensions Complicate Oil Price Predictions
2024-10-14 - Geopolitical tensions around the world are an ongoing wildcard for oil prices in the near-term, according to BOK Financial Securities’ Dennis Kissler. U.S. producers will have to pivot off of whatever hand they are dealt.
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.