(New York) Oil prices fell on Tuesday, in a market still concerned about the slowdown in demand, particularly in China, which could be accentuated by a sharp tightening of policy by the American central bank.
Posted at 3:58 p.m.
The price of a barrel of Brent from the North Sea for delivery in July, the most traded, fell 2.42% to end at 104.97 dollars.
The barrel of American West Texas Intermediate (WTI), with maturity in June, lost 2.62% to close at 102.41 dollars.
The operators have eyes only for China, where the massive containment continues in Shanghai, while Beijing remains under close surveillance, even if, in both cities, new cases tend to decrease.
On Tuesday, rating agency Fitch revised its growth estimate for China in 2022 down half a percentage point to 4.3% from 4.8% to take into account the effect of recent confinements but also the fact that, according to her, the authorities will not abandon their “zero COVID-19” policy until sometime next year.
“With rising interest rates, inflation, supply issues, there are more concerns that beyond China, economic growth may be weaker than expected there. a few more weeks,” says Michael Lynch, president of Strategic Energy & Economic Research (SEER).
The Fed’s decision, which is expected to raise its main key rate by half a percentage point on Wednesday (to between 0.75% and 1%), “could have an impact on the market” and undermine prices a little more. , according to Bart Melek of TD Securities.
“People fear that these effects on the economy will reduce demand from this summer, that it will be very weakened”, describes Michael Lynch.
For him, the proposed embargo of the European Union on Russian oil and its derivatives, which was to be submitted to member countries on Tuesday, weighed little on the market. “It looks like it will be very spread out over time,” he argued, “so it’s not influencing prices today.”
According to Bart Melek, the operators were, on the other hand, sensitive to the probable increase, Thursday, of around 400,000 barrels per day in June by the Organization of the Petroleum Exporting Countries (OPEC) and its allies of the OPEC + agreement.
According to the Bloomberg agency, OPEC+ only managed to increase its production by 10,000 barrels per day in April, when it promised 400,000, due to the lack of sufficient capacity of many of its members.
However, “we are not looking at the past, but at the future”, warned Bart Melek, and the continuation of the calendar of monthly increases, even if not kept, is a factor in the weakening of prices, according to him.