(New York) Oil prices fell on Monday, misguided by a leading US indicator which fuels questions about the demand for black gold, in a hesitant market.
The price of a barrel of Brent from the North Sea for delivery in April fell 0.85%, to close at 82.45 dollars.
As for the barrel of American West Texas Intermediate (WTI), also expiring in April, it dropped 0.83% to 75.68 dollars.
“Last week, we were concerned that the economy was too strong, and today, we fear that it is too soft. The market can’t make up its mind,” commented Phil Flynn of Price Futures Group.
This reversal was, in part, caused by an indicator, durable goods orders in the United States, which recorded a fall of 4.5% over one month in January, against a rise of 5.1% in December.
“The market is torn between concern about rate hikes in the United States”, which could slow hydrocarbon consumption, “and the hope of a vigorous rebound in Chinese demand”, observed in a note the Eurasia Group analysts.
In the United States, where commercial stocks of crude remain on seven consecutive weeks of increase, operators are concerned about the weak appetite of the American economy for refined products.
“We will have to wait for the refineries to resume service” after the traditional maintenance period in February to gauge demand and “see the market take a clear direction”, according to Phil Flynn.
Several PMI activity indicators expected this week, particularly in China and the United States, should give a first idea of the trajectory of several economies in February.
Brokers were insensitive to the announcement on Saturday by the Polish oil company PKN Orlen, which announced the halt in deliveries of Russian oil through the Druzhba pipeline.
Bank of America analysts have revised their price forecast for the barrel of Brent for 2023 to 88 dollars on average against 100 so far, mentioning a “slower start to the year than expected”.
“Absent clear signals of tension between supply and demand, which we should not see before the second quarter, market sentiment is likely to persist,” predict analysts at Eurasia Group.