What's Affecting Oil Prices the Week of November 19, 2018?




Brent fell $4.62/bbl last week to average $67.02/bbl. WTI fell $4.61/bbl last week to average $56.96/bbl. For the week ahead we expect Brent to average $66/bbl, partly because of a slow trading week in the US due to the Thanksgiving holiday.

Direct news will be light this week, but since nature and markets abhor a vacuum especially close attention will be paid to any Russian statements heading into the upcoming OPEC meeting. Russia has recently come out effectively saying that the group needs to be wary of making a hasty decision. This is a sentiment that was echoed by the IEA’s Fatih Birol. Expect additional statements from various associated producers in the days ahead as ministers position themselves heading into the meeting.

Elsewhere, global refiners continue to face a stark gasoline/gasoil imbalance heading into winter. While gasoil demand is being met with elevated runs, gasoline stocks are building in most enclaves, and could spell price weakness heading into next spring. The recent period of unilaterally elevated gasoil demand could be a preview of what will happen when IMO 2020 comes into effect. For now, cracks justify continuing to run for diesel, but future profitability could be more difficult to attain.

Geopolitical – Neutral

Dollar - Negative

Trader Sentiment – Negative

Supply – Neutral

Demand – Positive

Refining Margins - Positive

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