Commoditiy | Price | Weekly Change | 50day-Ave | 100day-Ave | 200day-Ave |
---|---|---|---|---|---|
Brent ($/b) | 89.61 | -0.77 | 84.82 | 81.74 | 83.99 |
US WTI ($/b) | 84.76 | -1.67 | 80.15 | 76.88 | 79.50 |
ICE Gasoil ($/MT) | 826.00 | -25.00 | 842.23 | 817.54 | 852.90 |
Jet CIF NWE ($/MT) | 877.09 | -7.64 | 873.72 | 864.25 | 899.74 |
Oil markets seem to have shrugged off the news of the Iranian strike on Israel on Saturday with Brent under 90 \$/b this morning. Iran has said there will be no further move from them unless Israel responds to the attack. The US has indicated that it would not support any Israeli attack on Iran and urging as small retaliation as possible. Israel’s defences prevented any significant damage, and the oil market seems to be taking comfort from that. Israel, however, has said that it will respond when the time is right, so the possibility of escalation is still there along with consequent upside risk to oil. If that response is confined to attacking Iran’s proxies such as Hezbollah though, the market might be justified in not being overly concerned about it.
Looking to the fundamentals, the International Energy Agency published their monthly report last week. Its 2024 demand forecast remains unchanged at 103.2 mb/d, but for the first time it has added a 2025 forecast, which it sees at 104.3 mb/d, a new record high and 1.1 mb/d higher than 2024. This compares with 1.4 mb/d 2024/23 growth, so a reduced growth rate. Its non-OPEC supply figure for 2024 is unchanged at 70. 4 mb/d, but its 2025 number is 71.9 mb/d, 1.5 mb/d higher which more than offsets the demand growth. This leaves the call on OPEC for 2024 unchanged at 27.3 mb/d, but the 2025 forecast is lower at 26.8 mb/d. This compares with the IEA’s March estimate for OPEC at 27 mb/d which suggests a deficit this year, especially over the summer, but a small surplus next year.
There is clearly a lot of uncertainty in the market at the moment so there is potential for some large moves. Over much of this month Brent has been in a range of 89 to 92 \$/b, so a move out of that range would be a first sign of larger move one way or another. On the downside, 85 \$/b acted as a support level in the 2nd half of March. Whereas, if the market breaks higher levels to keep an eye on are the October peak at 94 \$/b and the September high at 97.50 \$/b. It is likely that crude prices will follow headlines in the near term.