(New York) Oil prices ended slightly higher on Monday after a volatile session, caught between weakening demand in China and the prospect, closer than ever, of a European embargo on Russian imports.
Posted at 3:34 p.m.
After losing almost 4%, a barrel of Brent North Sea oil for July delivery finally closed up slightly 0.41% at 107.58 dollars.
As for the American West Texas Intermediate (WTI), due in June, it ended up 0.45% at 105.17 dollars.
“It’s a market that only lives by the rhythm of news,” said Stephen Schork, analyst and author of the Schork Report.
Depressed by the lack of signs of improvement in the situation in China regarding the coronavirus pandemic, prices had started to fall sharply.
This air pocket was also due to the publication of the first indicators illustrating the slowdown observed in China since the start of the new wave of confinements.
The Caixin PMI index of manufacturing activity thus fell, in April, to its lowest level since February 2020, at the start of the pandemic.
Prices then recovered, supported by information relayed by officials that a timetable for disengaging Russian oil imports should be announced this week by the European Union.
“This constant fluctuation is an accelerated version of what has been going on for weeks, with increases following decreases with clockwork regularity,” Carsten Fritsch of Commerzbank summed up in a note.
“The factors that influence the market cancel each other out,” according to the analyst, which explains why prices ended Monday close to their level at the previous close.
A European agreement was not expected on Monday, Carsten Fritsch recalling that if Germany had lifted its restrictions on an embargo, several members of the Union, Austria, Hungary, Italy or Slovakia, still had reservations.
But “the tone of the market remains on the rise”, according to Stephen Schork, who refers to the increase in demand for gasoline as the sunny days approach.
For the analyst, soaring energy prices have played a major role in the economic slowdown ahead.
Nevertheless, “I think that before we see the economy turn around, demand will increase further”, he announces, “so the risk remains on the upside. »