Brent fell $2.16/bbl last week to average $64.43/bbl, in line with Stratas Advisors' forecast. WTI fell $2.60/bbl to average $58.24/bbl. For the week ahead, Stratas Advisors expect Brent to continue drifting lower, likely averaging $63.50/bbl.
Little immediate bullish support for crude is present, but the recent signing of a U.S.-China trade deal helps provide a floor for prices. This week could see volatility in some Mediterranean-focused grades as Libyan supplies are interrupted once again. However, overall markets shrugged off the force majeure, as there is plenty of supply to fill the gap. Overall weakness in crude will likely continue through the first quarter per seasonal norms. The first quarter tends to see crude and product stock builds but any outsized movements in the U.S., Europe or Asia would still be viewed negatively. In China, Lunar New Year’s celebrations may entail less travel than usual as the country deals with outbreaks of a new coronavirus.
OPEC+ has been surprisingly silent about its plans for March. Some recent statements have indicated that there is room for an upside surprise in demand, but it is unclear how much that possibility is factoring into future actions. For now outages in Libya and Venezuela, along with generally decent compliance, are helping the organization meet its production goals. With Norway’s Johan Sverdrup field increasing deliveries, non-OPEC supply growth will be top of mind again and markets could be disappointed if stronger signals do not come from OPEC.
Geopolitical Unrest – Neutral
Global Economy – Neutral
Oil Supply – Negative
Oil Demand – Negative
Recommended Reading
Well Logging Could Get a Makeover
2024-02-27 - Aramco’s KASHF robot, expected to deploy in 2025, will be able to operate in both vertical and horizontal segments of wellbores.
Shell Brings Deepwater Rydberg Subsea Tieback Onstream
2024-02-23 - The two-well Gulf of Mexico development will send 16,000 boe/d at peak rates to the Appomattox production semisubmersible.
E&P Highlights: Feb. 26, 2024
2024-02-26 - Here’s a roundup of the latest E&P headlines, including interest in some projects changing hands and new contract awards.
Remotely Controlled Well Completion Carried Out at SNEPCo’s Bonga Field
2024-02-27 - Optime Subsea, which supplied the operation’s remotely operated controls system, says its technology reduces equipment from transportation lists and reduces operation time.
Tech Trends: Halliburton’s Carbon Capturing Cement Solution
2024-02-20 - Halliburton’s new CorrosaLock cement solution provides chemical resistance to CO2 and minimizes the impact of cyclic loading on the cement barrier.