What's Affecting Oil Prices the Week of February 11, 2019?

 

21119WAOP

Brent rose $0.67/bbl last week to average $62.18/bbl. WTI, however, fell $0.20/bbl to average $53.52/bbl. Both crudes lost strength throughout the week on the back of persistent concerns about the global economy. Prices also came under pressure as risks rise around the OPEC+ supply deal. In the US, there has been a revival of interest in NOPEC legislation. If such legislation were passed, or were seriously considered, OPEC members would have less political incentive to renew the current deal at its April meeting. On top of anti-“OPEC coordination” statements out of the US, cracks are beginning to appear in Moscow. Igor Sechin, the head of Rosneft, as well as President Putin’s close advisor, has apparently written to President Putin claiming that the OPEC+ agreement is a strategic threat to Russia, specifically because of the benefits the United States receives.

Other indicators are generally mixed next week. In Libya, rival governments’ forces are in a showdown over the El Sharara field. In the US, talks about a border wall have apparently collapsed, raising the possibility of another government shutdown.

For the week ahead we expect crude to continue to tread water with Brent, averaging $62/bbl, and WTI averaging $53.50/bbl.

Geopolitical – Positive

Dollar - Neutral

Trader Sentiment – Negative

Supply – Neutral

Demand – Positive

Refining Margins - Neutral

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