In the week since the last What’s Affecting Oil Prices, Brent rose only $0.31/bbl last week to average $78.80/bbl as WTI rose $1.34/bbl to average $70.29/bbl. Counter seasonal draws supported WTI and ongoing concerns around global supply are supporting Brent.
For the week ahead, we expect Brent to maintain its strength averaging $78.50/bbl after the OPEC/non-OPEC ministerial monitoring committee meeting ended with no formal agreement to raise production and without a plan to achieve the production levels agreed to at the June OPEC meeting.
Geopolitics will be a neutral factor in the week ahead.
The dollar will be a negative factor in the week ahead as fears of emerging market weakness stemming from a strong dollar impact demand expectations.
Trader Sentiment: Positive
Trader sentiment will be a positive factor in the week ahead as increasing Brent net longs point to ongoing concerns around supply.
Supply will be a positive factor in the week ahead, especially after the OPEC / non-OPEC meeting ended with no formal plan to raise production.
Demand will be a neutral factor in the week ahead as concerns grow about future demand in light of President Trump’s latest tariffs.
Refining will be a neutral factor in the week ahead, as product stocks enter the winter season elevated in both Europe and North America.
The weekly average Brent price fell $2.11/bbl last week to average $68.21/bbl. WTI fell even more sharply, down $3.80/bbl to average $57.01/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.
Brent to average $61/bbl as prices pause and markets reevaluate economic expectations.