In the week since our last edition of What’s Affecting Oil Prices, Brent fell $4.18/bbl last week to average $62.84/bbl. WTI fell $3.15/bbl to average $53.81/bbl. Prices have raised slightly heading into Nov. 26. While recent good news might stem the tide of losses, lingering concerns about demand and oversupply will continue to weigh and we expect prices to average $60/bbl this week.
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. In economic news, the EU has approved Britain’s exit plan, although the plan still faces a tough battle for approval in the legislature.
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. Additional reports continue to indicate that OPEC will likely agree to a production cut next week. While these expectations are lending some support to prices, if a cut fails to materialize or is smaller than expected, prices could move even more sharply lower.
Demand will be a positive factor in the week ahead.
Refining will be a positive factor in the week ahead.
Brent rose $2.30/bbl last week to average $73.92 last week while WTI rose a slightly slower $1.95/bbl to average $65.78/bbl.
For the week ahead we expect Brent to be generally range-bound and average closer to $71/bbl on news out of OPEC, concerns about U.S. crude builds, and ongoing trade tensions with China.
Overall crude oil stocks, not including the U.S. Strategic Petroleum Reserve, fell to 466.6 million barrels from their highest levels in 19 months.