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Prior to the beginning of last week Stratas Advisors forecast that the price of Brent crude would move sideways and would trade between $43.50 and $45.50. The forecast was based on expectations that while the extent of demand growth and supply of crude would continue to be negative factors, the sentiment of traders was shifting from a negative factor to a neutral factor. In actuality, the price of Brent crude traded within the firm’s expected price range until the latter part of the week, when the price of Brent crude broke upward to finish at $46.97.
The price of Brent was supported with the market grabbing onto the Saudi Arabia’s oil minister, indicating—once again—the possibility of being open to some coordination to support the oil market. The inventory report from the Energy Information Agency (EIA) was also viewed as being supportive of the price of Brent crude. While the report indicated that during the previous week inventories of crude increased by 1.06 million barrels, inventories of gasoline declined by 2.81 million barrels and inventories of distillate fuel declined by 1.96 million barrels.
Stratas Advisors’forecast also stated that the Brent-WTI differential would trade between $1.25 and $2with respect to the October contract. In actuality, the Brent-WTI differential started the week at $1.70 then narrowed to $1.48 on Tuesday before widening to close the week at $1.79.
For the upcoming week Stratas Advisors expects that the price of Brent crude oil will move toward $48.30. The firm also expects that the Brent-WTI differential will continue to trade between $1.25 and $2 with respect to the October contract.
What are the geopolitical, currency, supply-and-demand and other factors leading toward this forecast? The firm’s executive vice president, John Paisie, explains in this video.
You can also visit StratasAdvisors.com for more supporting information.
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