Brent continued to fall last week, down $4.62 a barrel to average $67.02 a barrel. West Texas Intermediate (WTI) fell $4.61 a barrel last week to average $56.96 a barrel. For the week ahead, Stratas Advisors expect Brent to average $66 a barrel, partly benefiting from a slow trading week in the U.S. due to the Thanksgiving holiday.
Direct news will be light this week, but since nature and markets abhor a vacuum, especially close attention will be paid to any Russian statements heading into the upcoming OPEC meeting.
Elsewhere, global refiners continue to face a stark gasoline/gasoil imbalance heading into winter, providing a sneak preview of what could happen when IMO 2020 comes into effect.
RELATED: OPEC: IMO 2020 To Spur One-Off Oil Demand, Hurt Heavy Crude Producers
Geopolitical: Neutral
Geopolitics will be a neutral factor in the week ahead although OPEC and non-OPEC oil ministers will likely continue to try and talk up the oil price.
Dollar: Negative
The dollar will be a negative factor in the week ahead. Fears around an increasingly tenuous Brexit negotiation are also lending additional support to the dollar, pressuring crude.
Trader Sentiment: Negative
Trader sentiment will be a negative factor in the week ahead as markets remain concerned about future demand and global oversupply.
Supply: Neutral
Supply will be a neutral factor in the week ahead. Russia has recently come out effectively saying that the group needs to be wary of making a hasty decision. This sentiment was echoed by the International Energy Agency’s (IEA) Fatih Birol. Expect additional statements from various associated producers in the days ahead as ministers position themselves heading into the meeting.
Demand: Positive
Demand will be a positive factor in the week ahead.
Refining: Positive
Refining will be a positive factor in the week ahead. While gasoil demand is being met with elevated runs, gasoline stocks are building in most enclaves and could spell price weakness heading into next spring. The recent period of unilaterally elevated gasoil demand could be a preview of what will happen when IMO 2020 comes into effect. For now, cracks justify continuing to run for diesel, but future profitability could be more difficult to attain.
Recommended Reading
E&P Highlights: March 15, 2024
2024-03-15 - Here’s a roundup of the latest E&P headlines, including a new discovery and offshore contract awards.
E&P Highlights: Jan. 29, 2024
2024-01-29 - Here’s a roundup of the latest E&P headlines, including activity at the Ichthys Field offshore Australia and new contract awards.
Rystad: More Deepwater Wells to be Drilled in 2024
2024-02-29 - Upstream majors dive into deeper and frontier waters while exploration budgets for 2024 remain flat.
TotalEnergies Fénix Platform Installed Offshore Argentina
2024-02-13 - First gas from the TotalEnergies-operated project is expected in fourth-quarter 2024.
Deepwater Roundup 2024: Offshore Europe, Middle East
2024-04-16 - Part three of Hart Energy’s 2024 Deepwater Roundup takes a look at Europe and the Middle East. Aphrodite, Cyprus’ first offshore project looks to come online in 2027 and Phase 2 of TPAO-operated Sakarya Field looks to come onstream the following year.