What's Affecting Oil Prices This Week? (Feb. 27, 2017)
For the last few weeks we expected that the price of Brent crude would break above $56 and would continue to trade above $56. Last week the price of Brent crude did break above $56 early in the week, but the price fell back to $55.99 by the end of the week.
Some support for the oil price stemmed from oil traders continuing to increase their net long positions. Meanwhile, the Brent-WTI differential continues to trade above $2 with respect to the April contract. Last week, the Brent-WTI differential started at $2.03 then widened to $2.33 early in the week before narrowing to close the week at $2. The narrowing of the Brent-WTI differential was the result of the price of Brent crude pulling back later in the week, and with U.S. crude inventories only increasing by 564,000 barrels.