For the upcoming week, Stratas Advisors is forecasting the price of Brent crude will move upward, testing $52.65. The firm also expects that the Brent-West Texas Intermediate (WTI) differential will trade in the range of $2.30 and $2.80 with respect to the June contract.

The week of April 17 saw a significant downward movement in the oil price, with Brent crude starting off at $55.89, drifting downward in the first part of the week, then falling sharply on April 19 and again on April 21 to close the week at $51.96.

The downturn in prices, which took place after three straight weeks of gains, seems to have been triggered by the rebounding production in the U.S. coupled with concerns that OPEC will not agree to extend the production cuts past June. The steep decline in the second half of the week was prompted by the weekly report from the Energy Information Administration, which showed that gasoline inventories increased the week before, in contrast to the expected drawdown.

Stratas Advisors' short-term forecasting team believes that the reaction of the market last week was overdone and that the price of Brent crude will still reach $60 before the end of the second quarter. The team is holding a Flash Webinar on April 25 to present its forecast for oil prices, in conjunction with an explanation of the key drivers.

Stratas Advisors Whats Affecting Oil Prices This Week April 24 2017 Chart

The Brent-WTI differential continues to trade in the range between $2 and $2.50. The Brent-WTI differential started the week of April 17 at $2.29, then narrowed in the middle of the week to just above $2 before widening to close the week at $2.34 on April 19.