In the week since our last edition of What’s Affecting Oil Prices, Brent prices averaged $67.83/bbl last week, down $2.17/bbl from the week before.
West Texas Intermediate (WTI) suffered a similar fate, falling $1.95/bbl last week to average $63.08/bbl. This came about despite a surprise draw in U.S. crude stocks and market concerns about the evolving trade dispute between the U.S. and China. This week could see prices stabilize with Brent averaging $68/bbl.
Geopolitical: Neutral
There is minimal news on the geopolitical front that is likely to influence prices this week. While perennial issues such as the decline in Venezuela and unrest in Libya remain, analysts do not expect them to become more impactful in the short term.
Dollar: Neutral
Fundamental and sentiment-related drivers continue to have more impact on crude oil prices. The dollar rose slightly last week while Brent and WTI both fell.
Trader Sentiment: Neutral
Nymex WTI and ICE Brent managed money net long positioning decreased slightly last week. Overall market sentiment remains supportive, but positioning has been moderating on both a lack of new bullish indicators and increasing concerns about the evolving U.S. and China trade dispute.
Supply: Negative
According to Baker Hughes, the number of U.S. oil rigs rose by 11 last week. U.S. oil rigs now stand at 808, compared with 672 a year ago. Evidence of renewed global oversupply continues to pose the greatest threat to prices.
Demand: Positive
U.S. consumption of petroleum products remains generally at or above seasonal averages in all products, including fuel oil. Economic indicators so far presage strong consumer spending through the summer demand season, and refined product demand is likely to remain a supportive factor in the short-term.
Refining: Positive
Margins rose in almost every enclave last week, due in large part to crude prices falling. Brent fell $2.17/bbl. Brent cracking and hydroskimming in Rotterdam both increased nearly $4/bbl. Margins remain at or above the five-year average in all enclaves, a boon for crude oil demand.
How We Did
Recommended Reading
Baker Hughes Makes Flare Emissions Breakthrough
2024-03-14 - Baker Hughes has developed a new application for flare.IQ, its emissions abatement technology.
Phillips 66 Reaches Milestone at San Francisco Bay Area Refinery
2024-04-02 - By the end of second-quarter 2024, Phillips 66 aims to have the complex finished and producing more than 50,000 bbl of renewable fuels.
Tangled Up in Blue: Few Developers Take FID on Hydrogen Projects
2024-04-03 - SLB, Linde and Energy Impact Partners discuss hydrogen’s future and the role natural gas will play in producing it.
Exclusive: Mitsubishi Power Plans Hydrogen for the Long Haul
2024-04-17 - Mitsubishi Power is looking at a "realistic timeline" as the company scales projects centered around the "versatile molecule," Kai Guo, the vice president of hydrogen infrastructure development for Mitsubishi Power, told Hart Energy's Jordan Blum at CERAWeek by S&P Global.
Shell Taps Bloom Energy’s SOEC Technology for Clean Hydrogen Projects
2024-03-07 - Shell and Bloom Energy’s partnership will investigate decarbonization solutions with the goal of developing large-scale, solid oxide electrolyzer systems for use at Shell’s assets.