In the week since our last edition of What’s Affecting Oil Prices, Brent fell $3.25/bbl last week to average $71.64/bbl. WTI fell $3.50/bbl to average $61.57/bbl. For the week ahead, we expect Brent to average $72.50/bbl.
While the pace of declines has slowed OPEC is clearly worried, and was out early on Nov. 12 attempting to talk up the market. The Ministerial Monitoring Committee has announced growing concern with the pace of supply growth in light of potential demand weakness next year. Saudi Arabia’s oil minister has explicitly called for a material reduction in imports. Given that a month ago, OPEC was broadcasting its ability to easily replace lost Iran volumes, we remain skeptical that now a significant production cut will be materializing. We will be exploring fluctuations in OPEC messaging against actual volumes in a report for subscribers this week.
While OPEC might succeed in stemming the slide in prices, we do not see current rhetoric as enough to inspire gains. Additionally, trading activity will likely be slow this week and next in light of the Veterans Day and Thanksgiving holidays in the U.S. Thus we maintain a relatively conservative price outlook for this week.
Recommended Reading
CEO: Baker Hughes Lands $3.5B in New Contracts in ‘Age of Gas’
2024-07-26 - Baker Hughes revised down its global upstream spending outlook for the year due to “North American softness” with oil activity recovery in second half unlikely to materialize, President and CEO Lorenzo Simonelli said.
Pemex Hits Debt Target, Struggles to Reverse Production Declines
2024-07-26 - Pemex achieved its long-term debt target, which aimed to gets its financial obligations below the $100 billion, while struggling to halt production declines.
Dividends Declared in the Week of July 22
2024-07-25 - Second quarter earnings are underway, and companies are declaring dividends.
NextDecade Appoints Former Exxon Mobil Executive Tarik Skeik as COO
2024-07-25 - Tarik Skeik will take up NextDecade's COO reins roughly two months after the company disclosed it had doubts about remaining a “going concern.”
Freeport LNG Parent Receives Junk-level Credit Score From Fitch
2024-07-25 - Credit-rating firm Fitch Ratings cited the 2 Bcf/d Texas plant’s frequent downtimes among the factors leading to lowering Freeport LNG Investments LLLP’s credit grade on July 25.