Last week was arguably one of the most active ones seen in this already atypical, surprising, and uncertain 2020. The week started with additional US sanctions on Iran, news about the increasing production from Libya, the impact of Hurricane Zeta on the US upstream and downstream sectors, as well as developments in the US presidential election, among other topics.
While the above list is notable, by far the main concern for oil market participants was the new wave of mobility restrictions imposed in several European countries, some of them seen as desperate attempts to control the uptick in infections in the run up to the holiday season. As a result, financial trading floors reacted from a bearish perspective last week, and this perspective was also transferred to oil markets. Crude futures contracts saw a downward adjustment, bringing Brent and WTI prices toward the mid $30’s, levels not seen since early May. This added up to net losses for both Brent and WTI prices during October (an average decline of around 10%).
This weekly report is an excerpt from our Short-Term Outlook service analysis, which covers a period of eight quarters and provides monthly forecasts for crude oil, natural gas, NGL, refined products, base petrochemicals and biofuels. Contact Jaime Brito (+1.713-377-0706 or E-mail) for the detailed analysis or for more information about the Short Term Outlook.