What's Affecting Oil Prices the Week of September 23, 2019?

 

                            WAOP92312019 
 

On a weekly average basis, Brent and WTI both increased last week, although Brent saw slightly more support. Brent increased $3.89/bbl to average $65.17/bbl last week. WTI increased $3.13/bbl last week to average $59.31/bbl. For the week ahead we expect Brent to average $64.50/bbl as a geopolitical price premium remains in place. 

Flooding in east Texas impeded some refinery activity and slowed shipments through the Houston Ship Channel. Direct damage from the flooding appears minimal and operations are swiftly returning to normal but minor crude or product builds could be reported in future weekly data. 

In the week ahead Saudi Arabia’s government is expected to press the United Nations to form a coalition to take action against Iran. However, potential allies remain reticent to commit to an armed intervention. Although there is likely to be ongoing inflammatory statements from both sides, the risk of a large-scale confrontation in the next week is low. However, Brent will maintain a geopolitical price premium of at least $3/bbl through the week.

Geopolitical Unrest – Positive

Global Economy - Negative

Oil Supply – Positive

Oil Demand – Neutral

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