(New York) Oil prices dipped slightly on Friday in the wake of another stock market tumble in New York, but the trend remains buoyant amid tensions between the U.S. and Russia over the situation in Ukraine .
Posted at 5:24 p.m.
Prices, which had fallen further during the session, regained some of the lost ground to conclude slightly down.
The price of a barrel of Brent from the North Sea for delivery in March dropped 0.55% to 87.89 dollars.
In New York, a barrel of West Texas Intermediate (WTI) for delivery in March, which is the first day of use as a benchmark contract, lost 0.47% to 85.14 dollars.
“Prices are being driven down by what you see in the stock market,” noted Andy Lipow of Lipow Oil Associate as Wall Street closed on a new low and the NASDAQ is clearly in the correction zone.
But basically, the oil market is supported by tensions around Ukraine. “Even though the dialogue has resumed, nothing has been resolved and tensions persist,” commented Mr. Lipow.
A deterioration of the situation in Ukraine could raise concerns for the gas pipeline that crosses the country. “US sanctions on Russia could also limit Moscow’s ability to sell oil to Europe,” Lipow said.
The small increase in US oil inventories announced the day before also put a brake on the surge in prices since the start of the year.
“Oil prices retreated on Friday after a meteoric rise since the beginning of the year, following the surprise increase in American inventories,” explained Han Tan, an analyst at Exinity.
Weekly U.S. oil inventory figures, released by the U.S. Energy Information Agency (EIA), showed a slight increase after seven weeks of declines, where analysts had expected a further drop in oil. 1.75 million barrels.
“The question now is whether the correction will continue or whether the lower price level will be seen by market participants as a buying opportunity,” said Carsten Fritsch, an analyst at Commerzbank.