The Week In Hindsight 21 February 2014
WTI gained this week as the cold weather induced demand in the US pushed WTI prices higher up until the final hours of the week.The benchmark briefly broke above $103 per barrel during the week before dropping back ahead of an inventories report due Friday afternoon. The report showed that stockpiles were not drawn down as fast as some had hoped over the period which lead to a moderate pullback in late afternoon trading.
Brent crude also gained on the week as it continues to react to supply concerns arising conflicts. The benchmark briefly touched noses with the $110.75 per barrel mark during the week before undergoing a moderate pullback, largely in line with WTI, during Friday trading.
Port closures in Libya were among the contributors to gains in Brent as the nation announced that output had declined by just over fifteen percent during the previous week. This was due to another key port falling into the hands of protesters.
Concerns also continued to mount throughout the week over the potential for further unrest across Africa and areas of the middle east. This was as violence erupted once again in South Sudan while Islamist militants in Egypt announced a deadline by which they expect foreigners to leave the country.
While Africa in general makes a significant contribution to global oil production, Egypt is a key transit point that bridges the gap between the Persian gulf and Europe. With developed market economic expectations remaining healthy for 2014 and such bouts of unrest and instability becoming ever more frequent in, among others, oil producing countries; we continue to expect robust support for prices over the months ahead.