Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
Brent prices averaged $64.95/bbl last week, gaining strength at the end of the week. This week prices will likely remain range-bound, averaging $65/bbl with the Brent-WTI differential remaining about $3.50/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, we 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 moved sideways last week as crude oil rose slightly. Crude oil will likely remain only marginally influenced by DXY in the week ahead.
Trader Sentiment - Positive
ICE Brent and Nymex WTI managed money net positioning both fell slightly last week. Short-selling also indicates that producer level hedging has ticked up in recent weeks as producers take full advantage of recently high prices before a possible correction. Trader sentiment remains generally positive despite recent increases in U.S. production.
Supply – Negative
According to Baker Hughes, the U.S. rig count fell for the first time in six weeks last week. Such fluctuations in rig numbers are common and we do not believe this is the start of a trend. We continue to expect that the impact on production of these rising rigs will likely start to be seen in May. Libya has been having trouble keeping fields online in recent weeks due to protests, which has reduced production slightly. 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 except fuel oil.
Refining – Neutral
Global refining margins fell across the board last week with the largest decline seen on the U.S. Gulf Coast. Declines in margins appear to be slowing, and we could even see some strengthening in margins in the weeks ahead as Asian refinery maintenance is underway. However, in the meantime, margins are not robust enough to incentivize additional runs of a level likely to support crude.
How We Did
Recommended Reading
CNOOC Sets Increased 2024-2026 Production Targets
2024-01-25 - CNOOC Ltd. plans on $17.5B capex in 2024, with 63% of that dedicated to project development.
Range Resources Expecting Production Increase in 4Q Production Results
2024-02-08 - Range Resources reports settlement gains from 2020 North Louisiana asset sale.
After 4Q Struggles, Transocean’s Upcycle Prediction Looks to Pay Off
2024-02-21 - As Transocean executives predicted during third-quarter earnings, the company is in the middle of an upcycle, with day rates and revenues reaching new heights.
Comstock Continues Wildcatting, Drops Two Legacy Haynesville Rigs
2024-02-15 - The operator is dropping two of five rigs in its legacy East Texas and northwestern Louisiana play and continuing two north of Houston.
Trio Petroleum to Restart McCool Ranch Oilfield
2024-01-07 - California’s Trio Petroleum plans to restart oilfield production at McCool Ranch, where six wells that previously reached a production peak of 400 bbl/d.