Brent fell $2.87 per barrel (bbl) last week to average $77.39/bbl. West Texas Intermediate (WTI) fell $2.78/bbl to average $67.47/bbl. For the week ahead we see Brent weakening slightly more, averaging $75/bbl, perhaps slightly higher. We think Brent is likely nearing the price floor, and technical indicators seem to confirm that recent price movements have been fairly balanced.
With the November deadline quickly approaching, and major customers continuing to buy Iranian crude oil, pressure is increasing on the White House to issue waivers. If waivers are issued this week, prices would be much more likely to reach $75/bbl as supply concerns are mitigated.
Markets reacted positively to news that Jair Bolsonaro won the Brazil presidential election, but risks abound. For much of Bolsonaro’s political career he has been an economic nationalist, which means he is unlikely to support nationalizing assets such as oil production and electricity generation.
Recommended Reading
Analysts: Diamondback-Endeavor Deal Creates New Permian Super Independent
2024-02-12 - The tie-up between Diamondback Energy and Endeavor Energy—two of the Permian’s top oil producers—is expected to create a new “super-independent” E&P with a market value north of $50 billion.
APA Closes $4.5B Callon Deal, Deepening Permian Roots
2024-04-01 - About two-thirds of Apache’s daily production will come from the Permian Basin after APA Corp. completed its $4.5 billion takeout of Callon Petroleum.
Marketed: EnCore Permian Holdings 17 Asset Packages
2024-03-05 - EnCore Permian Holdings LP has retained EnergyNet for the sale of 17 asset packages available on EnergyNet's platform.
Continental Resources Makes $1B in M&A Moves—But Where?
2024-02-26 - Continental Resources added acreage in Oklahoma’s Anadarko Basin, but precisely where else it bought and sold is a little more complicated.
Matador Hoards Dry Powder for Potential M&A, Adds Delaware Acreage
2024-04-24 - Delaware-focused E&P Matador Resources is growing oil production, expanding midstream capacity, keeping debt low and hunting for M&A opportunities.