For the upcoming week, Stratas Advisors is forecasting the price of Brent crude will be under pressure with support at $50. The firm also expects that the Brent-West Texas Intermediate (WTI) differential will fall back into the range of $2 and $2.50 with respect to the June contract.

Prior to the beginning of last week, Stratas Advisors forecasted the price of Brent crude would bounce along sideways with support at $50.80. The forecast was based on the expectation that signals of strengthening demand would offset the negative perceptions pertaining to supply.

The firm's forecast was aligned fairly well with the forecasted floor but was more optimistic than the actual price movement throughout the week. The price of Brent crude started the week March 20 at $51.76, then fell in the middle of the week to $50.46 before rebounding on March 24 to close at $50.90.

Downward pressure came from the Energy Information Agency, which reported crude inventories increased by 4.954 million barrels the previous week. Additional pressure came from oil traders continuing to decrease their net long positions with decreases in each of the last four weeks.

Whats Affecting Oil Prices This Week Of March 27 2017 Graph

Stratas Advisors also forecasted the Brent-WTI differential would trade between $2 and $2.50 with respect to the May contract. With the increase in crude inventories, the Brent-WTI differential widened beyond the firm's expectations.

The Brent-WTI differential started the week at $2.45, widened to $2.71 on March 20, and narrowed on March 22 to $2.60 before widening again to finish the week at $2.83 on March 24. In comparison, the Brent-WTI differential at the end of February was at $1.58.