The price of Brent crude ended the week at $74 after closing the previous week at $72.91. The price of WTI ended the week at $70.26 after closing the previous week at $69.45. The price of DME Oman crude ended the week at $75.28 after closing the previous week at $73.03.

At the beginning of last week, we thought that oil prices would get a boost from the oil demand associated with the holiday season. We also expected that oil prices would get a boost from recent geopolitical news with the ongoing conflict in the Middle East that now involves Israel and the Houthis exchanging aerial attacks. The conflict between Russia and Ukraine has also been heating up, with Ukraine launching aerial attacks deep within Russia while Russia is making gains on the ground along the eastern front and intensifying its aerial attacks across Ukraine. Countering these supporting factors, we expected there would be some downward pressure from the Federal Reserve, indicating that it will be cautious with respect to the pace of rate cuts during 2025. The resulting strong U.S. dollar is also putting downward pressure on oil prices. While the U.S. Dollar Index was down slightly last week (108.006 vs 108.454 of the previous week), the U.S. Dollar Index has increased significantly during 4Q, with the U.S. Dollar Index at 100.355 at the end of September.

Looking forward, we are expecting that Brent oil will average $76.90 in 1Q25.

For a complete forecast of crude oil and refined products and other energy-related fundamentals and prices, please refer to our Short-term Outlook.

About the Author: John E. Paisie, president of Stratas Advisors, is responsible for managing the research and consulting business worldwide. Prior to joining Stratas Advisors, Paisie was a partner with PFC Energy, a strategic consultancy based in Washington, D.C., where he led a global practice focused on helping clients (including IOCs, NOC, independent oil companies and governments) to understand the future market environment and competitive landscape, set an appropriate strategic direction and implement strategic initiatives. He worked more than eight years with IBM Consulting (formerly PriceWaterhouseCoopers, PwC Consulting) as an associate partner in the strategic change practice focused on the energy sector while residing in Houston, Singapore, Beijing and London.

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