(London) Oil prices continued to fall on Thursday, after a plunge the day before, weighed down by fears of recession combined with international efforts to lower the price of crude and therefore fuel in a context of galloping inflation.
Posted at 7:34
Around 6:15 a.m., a barrel of Brent from the North Sea for August delivery fell 0.69% to 110.97 dollars.
A barrel of American West Texas Intermediate (WTI) for delivery the same month lost 0.80% to 105.34 dollars.
“Oil prices remain under pressure amid fears of recession,” commented Carsten Fritsch, analyst at Commerzbank.
On Wednesday, prices fell more than 6% after President Joe Biden asked the US Congress to suspend a federal tax on gasoline prices for three months, before limiting their losses at the end of the session.
The proposal has caused “a tidal wave of sales”, says Tamas Varga, an analyst at PVM Energy, although its “ultimate impact should be moderate”.
For several months, the “vigor of prices has been due to fears of a shortage of supply”, continues the analyst, who underlines that “these fears have not been alleviated and a tax exemption would not lead to additional offer.
“Temporary tax cuts do not permanently reduce prices, because they stimulate demand”, also argues Carsten Fritsch.
This fall in prices, however, was “revealing”, says Tamas Varga. “It’s the destruction of demand that will bring relief to the pump. »
Analysts say recession fears are clearly growing.
A recession in the United States “is certainly a possibility”, admitted the chairman of the American Federal Reserve (Fed) Jerome Powell during his annual hearing before a congressional committee.
For Stephen Innes, however, an analyst at Spi Asset Management, this fall in prices “seems to have the characteristics of an unexpected drop due to supply”.
“We know Russia is putting more barrels on the market,” he says.
In addition, the increase in the supply of oil is at the top of the American political agenda, recalls the analyst.
“We believe it is an illusion not to expect ‘lower oil prices’ when central banks and politicians around the world have their sights set on higher oil prices, and the pressure is indeed stronger and stronger,” he said.