In the week since our last edition of What’s Affecting Oil Prices, Brent prices pushed higher to average above $70/bbl on a weekly basis.
For the upcoming week, Stratas Advisors expect Brent prices to pull back and average $69/bbl. This week the analysts expect the West Texas Intermdiate-Brent differential to average $4/bbl, after a substantial fall last week.
Geopolitics will be a negative factor in the week ahead. Outside of the perennial issues around Venezuela the geopolitical landscape remains quiet, which Stratas Advisors believe will put some pressure on prices.
The dollar continues to fall, with the relationship between crude and the dollar beginning to strengthen. Thus, Stratas analysts see this as a positive factor for crude prices.
Trader Sentiment: Positive
Record long positions are reflecting positive trader sentiment, despite the risk of a correction in such overbought territory.
A bump of 12 rigs last week pushed the U.S. to record production levels, making this a negative factor this week.
Demand in the U.S. remains volatile due to weather concerns. This is not likely to move the market substantially and remains a neutral factor.
Refining margins around the world strengthened last week, making this variable a positive factor.
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