Weekly Fundamental Crude Oil Price Forecast: Neutral
- Volatility in global markets is persisting, but for now it’s still translating into a mostly bullish environment for energy prices amid supply chain concerns and an energy supply production deficit (relative to demand).
- Despite the ongoing bullish fundamental environment in the near-term, the narrative may soon begin to shift as traders look towards next year.
- The IG Client Sentiment Index[1] suggests thatcrude oil[2] priceshave a mixed trading bias.
Energy Prices Week in Review
Volatility in global markets is persisting, but for now it’s still translating into a mostly bullish environment for energy prices amid supply chain concerns and an energy supply production deficit (relative to demand). Despite calls for increased oil[3] production from OPEC+, Saudi Arabia – the most significant member of OPEC+ – said that the group was already “increasing production.”
OPEC+ will continue to increase oil production by 400,000 barrels per day (bpd) in November and in the following months, noted Saudi energy minister Prince Abdulaziz bin Salman last week.
Crude oil prices added another +3.69%, closing at 82.28 per barrel, their highest level since October 2014. Meanwhile, Brent oil moved up by +2.11% at 84.84 per barrel, finishing at their highest level since October 2018. Elsewhere, natural gas[4] prices tallied their third-highest close of 2021 despite losing -2.79%, finishing at levels unseen since February 2014; the contract closed at 5.410 MMBtu.
Despite the ongoing bullish fundamental environment in the near-term, the narrative may soon begin to shift as traders look towards next year. Saudi energy minister Prince Abdulaziz said that 2022 was looking like “a bit of a challenging year,” as OPEC+ figures show that the oil market is due to return to a surplus of
