What's Affecting Oil Prices the Week of May 13, 2019?

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Brent fell $1.19/bbl to average $70.54 last week while WTI fell $1.12/bbl to average $61.84/bbl. For the week ahead we expect Brent and WTI to be range-bound with Brent averaging $70/bbl. 

Stock markets largely shook off President Trump increasing tariffs on China after China agreed to continue trade negotiations. However, with no substantive progress made by the end of the day Friday increased tariffs have taken effect. Oil markets remain cautious but were pressured by concerns about overall economic health if the trade wars drags on. 
Hedge funds took divergent positions on Brent and WTI last week, in an indication that supply was of greater concern than future demand. In the US, funds remain concerned about the pace of US shale growth, with recent weekly data indicating a fresh high. Internationally however, a medley of issues continue to threaten volumes. The weeks ahead are likely to see similar positioning trends as tensions mount around Iran and Venezuela. At the same time, refiners are returning from maintenance in the US. If crude runs increase and crude stocks continue to build, markets will quickly turn bearish.

Geopolitical Unrest – Positive

Global Economy - Neutral

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Oil Supply – Neutral

Oil Demand – Neutral

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