Brent rose a modest $0.42/bbl last week to average $65.91/bbl, pretty much in line with our forecast of $66/bbl. WTI rose $0.23/bbl to average $56.42/bbl. For the week ahead we expect Brent to continue having trouble gaining traction, hovering near the $65/bbl mark with the potential to fall farther.
Disappointing economic data released at the end of last week will continue to pressure prices this week. Sagging equity markets will drag on energy prices. Added to that, markets will be closely watching the latest data from the IEA’s monthly Oil Market Report, released on Friday. If the report indicates growing concerns about oversupply, expect a sharp move lower.
In the US, speculators raised their net long positions, likely driven by optimism that a trade deal would soon be struck between the US and China. However, Brent managed money net long positioning fell. The rekindling of fears about the global economy combined with optimism about the state of global supply make it difficult to ascribe clear sentiment to current markets.
Geopolitical – Neutral
Dollar - Negative
Trader Sentiment – Neutral
Supply – Negative
Demand – Neutral
Refining Margins - Neutral