In a Stratas Advisors report despatched to Rigzone by the Stratas workforce late Monday, the corporate warned that it’s anticipating “some moderation of oil costs”.
“For the upcoming week, we expect that there will likely be some moderation of oil costs, partly from the newest jobs report launched by the Bureau of Labor Statistics that confirmed the U.S. added 256,000 jobs in December,” the corporate mentioned within the report.
“In conjunction, the U.S. Greenback Index elevated, ending the week at 109.65 from the earlier week of 108.92, and is at its highest stage since October 2022 and up from 100.42 on September 22, 2024,” it added, noting that “the sturdy U.S. greenback makes oil costlier for these non-USD nations which are importing oil”.
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“The U.S. 10-Yr Treasury ended the week at 4.769 p.c, up from 4.151 p.c on December 6, 2024, and from 3.621 p.c on September 16, 2024. The rising 10-year price makes it harder for the Federal Reserve to chop rates of interest, which in flip is resulting in a stronger greenback,” the corporate went on to state.
Within the report, Stratas Advisors additionally warned that there’s “some adverse information related to China’s economic system, with experiences that company income have decreased for a 3rd consecutive yr”.
The corporate additionally said within the report that it has its doubts in regards to the final effectiveness of the extra U.S. sanctions.
“China stays the biggest buyer for Russian oil exports, together with crude oil,” the report said.
“India is one other main buyer of Russian crude oil and has lately signed a significant contract to proceed importing Russian crude oil for his or her refineries. We don’t anticipate that China will change its conduct with respect to Russia’s oil, particularly since China doesn’t acknowledge the present U.S. sanctions,” it added.
“We anticipate the identical from India, with the caveat that India might be extra vulnerable to stress from the incoming Trump administration to cut back its oil imports from Russia,” it continued.
“As such, we expect the market’s speedy response to the announcement of the brand new sanctions is probably going an overreaction,” it went on to state.
Stratas Advisors famous within the report that it expects that there’s nonetheless some room for oil costs to maneuver increased this week however added that the worth of Brent crude oil will wrestle to breakthrough $82.50 per barrel.
Rigzone has contacted the White Home, the Trump transition workforce, the Press Service and Info Division of the Russian Authorities, the Chinese language authorities, and ministry officers on the Indian Ministry of Energy for touch upon the Stratas Advisors report. On the time of writing, not one of the above have responded to Rigzone but.
In a Skandinaviska Enskilda Banken AB (SEB) report despatched to Rigzone by the SEB workforce on Tuesday morning, Bjarne Schieldrop, chief commodities analyst on the firm, mentioned “the present value of Brent crude at $80.6 per barrel may be very low versus the place the 1-3 month time spreads are buying and selling”.
“Brent ought to usually have traded someplace between $80-$95 per barrel with present time-spreads once we examine the place this relationship has been buying and selling for the reason that begin of 2023,” he added.
“Brent is now buying and selling within the absolute decrease vary of that with a lot of room on the upside,” he continued.
Schieldrop famous within the report that the market proper now “appears technically overbought with RSI at 72 but in addition essentially very tight with the Dubai 1-3 month time-spread at $2.74 per barrel, its highest stage since September 2023”.
“As such the Brent crude oil value has the potential to coil up for additional positive aspects following some washing out of technically overbought dynamics,” he added.
In a analysis observe despatched to Rigzone by the JPM Commodities Analysis workforce on Monday, analysts at J.P. Morgan famous that, between December 23 and January 8, oil costs rose over six p.c.
“The hole between realized and forecasted costs, which widened to almost $10 final yr, has now closed, aligning Brent with our $75 truthful worth for January,” the analysts mentioned within the analysis observe.
“This value motion is probably going pushed by considerations over provide disruptions from tightening sanctions, low oil stockpiles, freezing temperatures within the U.S. and Europe, improved sentiment on China’s stimulus, cleaner positioning, and CTA short-covering flows,” they added.
“We anticipate costs to stay steady for many of the yr, dipping beneath $70 within the closing quarter, averaging $73 for the yr,” the analysts went on to state.
The analysis observe confirmed that J.P. Morgan expects the Brent crude oil value to common $74 per barrel within the first quarter of 2025, $77 per barrel within the second quarter, $73 per barrel within the third quarter, $69 per barrel within the fourth quarter, and $73 per barrel general in 2025.
The Brent crude oil value averaged $82 per barrel in 2024, in response to the analysis observe.
To contact the writer, electronic mail andreas.exarheas@rigzone.com
