In the week since our last edition of What’s Affecting Oil Prices, Brent prices softened slightly to average $69.15/bbl.
For the upcoming week, Stratas Advisors expect Brent prices to continue to pull back and average $68/bbl. This week the analysts expect the Brent-West Texas Intermediate differential to remain steady around $4/bbl.
Geopolitical: Neutral
Geopolitics will be a neutral factor in the week ahead with little news on the geopolitical front that is likely to influence prices.
Dollar: Positive
After brief strength due to better than expected jobs data, the dollar will likely continue to fall. With the stronger relationship between crude and the dollar, the dollar weakening will lend support to crude.
Trader Sentiment: Positive
Still strong long positions are reflecting positive trader sentiment, despite the risk of a correction in such overbought territory.
Supply: Negative
Supply will be a negative factor in the week ahead as U.S. rigs and production continue to increase.
Demand: Neutral
Demand remains generally strong although fluctuating weather throughout the U.S. continues to temporarily impact flows.
Refining: Neutral
Refining margins rose slightly again last week, but are likely not high enough to incentivize additional increased runs.
