Brent continued to fall last week, down $4.62 a barrel to average $67.02 a barrel. West Texas Intermediate (WTI) fell $4.61 a barrel last week to average $56.96 a barrel. For the week ahead, Stratas Advisors expect Brent to average $66 a barrel, partly benefiting from a slow trading week in the U.S. due to the Thanksgiving holiday.
Direct news will be light this week, but since nature and markets abhor a vacuum, especially close attention will be paid to any Russian statements heading into the upcoming OPEC meeting.
Elsewhere, global refiners continue to face a stark gasoline/gasoil imbalance heading into winter, providing a sneak preview of what could happen when IMO 2020 comes into effect.
Geopolitics will be a neutral factor in the week ahead although OPEC and non-OPEC oil ministers will likely continue to try and talk up the oil price.
The dollar will be a negative factor in the week ahead. Fears around an increasingly tenuous Brexit negotiation are also lending additional support to the dollar, pressuring crude.
Trader Sentiment: Negative
Trader sentiment will be a negative factor in the week ahead as markets remain concerned about future demand and global oversupply.
Supply will be a neutral factor in the week ahead. Russia has recently come out effectively saying that the group needs to be wary of making a hasty decision. This sentiment was echoed by the International Energy Agency’s (IEA) Fatih Birol. Expect additional statements from various associated producers in the days ahead as ministers position themselves heading into the meeting.
Demand will be a positive factor in the week ahead.
Refining will be a positive factor in the week ahead. While gasoil demand is being met with elevated runs, gasoline stocks are building in most enclaves and could spell price weakness heading into next spring. The recent period of unilaterally elevated gasoil demand could be a preview of what will happen when IMO 2020 comes into effect. For now, cracks justify continuing to run for diesel, but future profitability could be more difficult to attain.
Asia's top refiner China Petroleum & Chemical Corp. (Sinopec) boosted spending on exploration and production by 41% last year as crude oil reserves tumbled at its biggest oilfield.
Tanzania says it plans to conclude talks in September with a group of foreign oil and gas companies led by Norway's Equinor on developing a liquefied natural gas (LNG) project in the East African country.
Comments from executive contrast with company’s previous statements.