Brent fell $1.29/bbl last week to average $71.82/bbl as WTI fell $1.79/bbl to average $66.12/bbl. The Brent-WTI spread widened slightly more to end the week at $5.92/bbl. We expect Brent to continue falling next week, to average $68/bbl.
Sentiment will continue to sour against crude futures, especially in the US as demand seasonally slows and production remains strong. Internationally, attention remains focused on trade talks between the United States and multiple counterparties. Beijing is sending a trade envoy to Washington, D.C. for the first time in several months, and rumors indicate that Mexico and the US are close to a preliminary deal on NAFTA. While the usual melting pot of simmering geopolitical issues could certainly crop up, there are no developments expected this week. Emerging markets will also remain an area of focus, after the volatility in Turkey and fears around contagion pulling down the rupee and other currencies.