The price of Brent crude ended the week at $74.99 after closing the previous week at $72.97. The price of WTI ended the week at $69.25 after closing the previous week at $66.74.  

Weekly Oil Price Outlook

President

John E. Paisie

This weekly report is an excerpt from our&nbsp;Short-Term Outlook service&nbsp;analysis, which covers a period of eight quarters and provides monthly forecasts for crude oil, natural gas, NGL, refined products, base petrochemicals and biofuels.&nbsp; Contact John Paisie (+1-832-517-7544)&nbsp;for the detailed analysis or for more information about the Short Term Outlook.
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<img alt="Infographic" src="https://cdn.aglty.io/stratas-advisors/upload/032723-WAOP-Infographic.png" />
The price of Brent crude ended the week at $74.99 after closing the previous week at $72.97. The price of WTI ended the week at $69.25 after closing the previous week at $66.74. &nbsp;
While crude prices recovered a portion of the significant downturn that occurred during the previous week, oil prices are still facing some headwinds. There is adequate supply available with demand growth remaining muted, including in the US where oil demand has been lagging demand of last year. Based on the 4-week average, current gasoline demand is running only 14,000 b/d behind last year but diesel demand is lagging last year&rsquo;s demand by 549,000 b/d. The decline in gasoline and diesel demand is offsetting the increase in jet fuel demand which is running ahead last year&rsquo;s demand for the last four weeks by 101,000 b/d. (in comparison to 2019, demand of gasoline, diesel and jet fuel are all running well below pre-COVID demand). While China has removed COVID-related restrictions, the rebound in the economy has been relatively modest. It has also been recently reported that Russia is planning to enable the maintenance of its crude oil exports by reducing refinery runs (by taking some refining capacity offline) in April to offset cuts in oil production.
While the central banks are raising interest rates, concerns about the health of the banking sector are also increasing. Regional banks in the US continue to be under pressure with billions of their deposits being shifted to the &ldquo;too big to fail&rdquo; banks and money market funds. Additionally, the rising interest rates are having a negative effect on the US housing market. One indication is that the median price of US homes is now lower than during the same period of the previous year. The automotive sector is also showing strains, as indicated by the Cox Automotive Dealer Sentiment for 1Q 2023 at 43 (reading below 50 are negative) which is the lowest level since the COVID days of 2020. Consumers are also under pressures with credit card debt at a record high coupled with record high interest rates. Additionally, real wages have been declining for the last two years with wage increases significantly lagging the inflation rate.
These concerns are also being reflected by the sentiment of oil traders, which is increasingly negative. Last week, traders of Brent crude decreased their net long positions by 27.20%, which follows the decrease of 21.76% of the previous week. Traders of WTI decreased their net long positions by 42.49% and their net long positions have now dropped to the levels not seen since 2010.&nbsp;
We still think that the price of Brent has support around $70.00 and the price of WTI has support around $65.00. As such, we think it will take some other unexpected bad news to break below these levels &ndash; such as another bank failure. It will also take some unexpected, good news to push the price of Brent above $80.00 and WTI above $75.00 &ndash; such as a production cut by OPEC+.
For a complete forecast of refined products and prices, please refer to our <a href="~/services/services?ContentID=190" target="_blank" rel="noopener">Short-term Outlook</a>
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