What’s Affecting Oil Prices This Week (March 25, 2019)?

In the week since our last edition of What’s Affecting Oil Prices, Brent rose $0.67/bbl last week to average $67.71/bbl. WTI saw much stronger gains, increasing $1.58/bbl to average $59.39/bbl.

Managed money net long positioning for WTI also increased substantially in the CFTC’s latest report. For the week ahead, we expect both crudes to increase at more similar paces and Brent will likely average around $68/bbl.

Sanctions against Iran and Venezuela, as well as OPEC’s commitment to production cuts, have helped support prices. At the latest JMMC meeting, the members of the agreement announced that another meeting was not necessary in advance of the April OPEC meeting. Instead, a meeting should be scheduled in advance of the June meeting, when a decision about the fate of the production agreement will be made.

In the U.S., the onshore oil rig count fell for the fifth straight week. Product demand continues to hew to seasonally typical levels, disproving fears about a collapse in demand. In Europe, all product stocks except jet fuel are below their five-year average levels and product stocks are also generally falling in Singapore.

Geopolitical: Neutral

Dollar: Neutral

Trader Sentiment – Positive

Supply: Neutral

Demand: Positive

Refining Margins: Neutral

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