In the week since our last edition of What’s Affecting Oil Prices, Brent prices were nearly flat, up only 37 cents to average $77.56/bbl. WTI prices saw more support, rising nearly $2 to average $73.71/bbl.
The week ahead will see both prices continue to climb on higher demand and myriad supply outages. We expect that Brent prices will likely average at least $78/bbl in the week ahead, while WTI could potentially reach $75. We reiterate that the strength in WTI is likely temporary, driven primarily by a production outage in Canada.
Geopolitics will be a positive factor in the week ahead as fighting in Libya and sanctions against Iran are supporting prices.
The dollar will be a neutral factor in the week ahead as fundamental and sentiment-related drivers continue to have more impact on crude oil prices.
Trader Sentiment: Neutral
Trader sentiment will be a neutral factor in the week ahead, with fundamentals providing more direction to crude prices.
Supply will likely be a marginally positive factor in the week ahead with Venezuelan, Iranian, Libyan and Syncrude volumes all constrained.
Demand will be a neutral factor in the week ahead as rising prices fail to stymie demand but also do not create opportunities for strong growth.
Refining will be a neutral factor in the week ahead with margins, especially in Asia, continuing to fall on higher crude prices and more regional product supply.
How We Did
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