The Week In Hindsight, 21 March 2014

Both oil benchmarks began the week under pressure on Monday as markets opted to shrug off Russia’s annexation of Crimea and focus instead on economic data due over the week. The FOMC meeting scheduled for Wednesday further added to pressure upon oil as the investors bet on policy makers reducing the pace of stimulus.

Higher inventories in the US also helped to push WTI lower during the middle of the week although both Brent and WTI posted a strong recovery ahead of the weekend as the likelihood increased that the west would impose credible sanctions upon Russia.

Given that the diplomatic dispute over Crimea is likely to go unresolved for some time, and that further escalations cannot be ruled out, we continue to expect strong support for both oil benchmarks at or around current levels for the foreseeable future.

Brent/WTI Crude