(New York) Oil prices ended near flat on Tuesday, unable to capitalize further on surprise production cuts by several members of the OPEC+ alliance, with the market worried more about demand than supply.
The price of a barrel of Brent North Sea oil for June delivery gained a small cent, to close at $84.94.
A barrel of American West Texas Intermediate (WTI), expiring in May, gained 0.36%, to 80.71 dollars.
Earlier, the two benchmark varieties of black gold had fallen more than 1%, before recovering late in the session.
The announcement, shortly before closing, of the restart in France of the Esso-ExonMobil refinery in Port-Jérôme-Gravenchon, which has been shut down since March 25, helped prices end in the green, but the mood remained gloomy.
“The supporters of a hike were well positioned on Sunday evening, but I think they are not so confident today,” commented Stephen Schork, analyst and author of the Schork Report.
The announcement on Sunday of a voluntary production cut of 1.16 million barrels per day, initiated by eight members of the cartel formed by the Organization of the Petroleum Exporting Countries (OPEC) and its allies of the OPEC + agreement , had taken off the course on Monday.
Brent and WTI ended up more than 6% each.
But for Michael Zuzolo, of Global Commodity Analytics and Consulting, this shock inflicted on the offer is “eclipsed by a general malaise linked to a possible recession which has gripped the market”.
Economists were already counting, before the announcement, on a slowdown in the economy, probably accelerated by the banking crisis.
Several American macroeconomic indicators published over the past two days have reinforced this idea, in particular the ISM activity index in the manufacturing sector in March, which came out on Monday well below what was expected and testifying to a contraction in the economy.
“Reduce production” as certain members of the OPEC+ alliance intend to do, “because you think that the contraction in demand will make it fall below supply, it is not necessarily likely to increase classes,” according to Stephen Schork.
The analyst noted that the put options on oil (a contract that guarantees a selling price) were worth more on Tuesday than the call options, testifying to a lack of conviction of the operators on a prolonged momentum. .
“The rebound in crude has hit a wall as pessimism is gaining the market, which sees the US economy heading into a recession,” said Edward Moya of Oanda in a note.
The slowdown in prices was, moreover, accentuated by the signing of an agreement allowing the resumption, as of Tuesday, of oil exports from Iraqi Kurdistan, a file which had blocked the transport of millions of barrels for ten days.