Oil slides further after disappointing US economic indicators

(London) Oil remained slightly down on Friday, after falling about 6% over the week, as fears around the US economy persisted after economic indicators were less encouraging than expected.


Around 5:50 a.m., a barrel of Brent from the North Sea for delivery in June slid 0.18% to 80.95 dollars.

Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery the same month, which is the first day of use as a benchmark contract, dropped 0.16% to 77.25 dollars.

Over the week, the two world crude benchmarks lost more than 6%, and are approaching the price levels which had prompted certain members of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) in early April to announce cuts. volunteers of their production, which should start in May until the end of 2023.

“The mood in the oil markets is one of continued concern and caution over the risks to growth in the US and inflation globally,” said Stephen Innes of SPI AM.

Disappointing economic data in the United States is reigniting fears about the health of the world’s largest economy.

New weekly jobless claims rose more than expected, and U.S. home resales fell in March, more than analysts expected, according to data released Thursday.

Finally, manufacturing activity in the Philadelphia area fell to the lowest since May 2020.

“Weaker growth forecasts and persistently high inflation, forcing central banks to raise rates […] are likely the reasons why oil investors “are more reluctant to purchase crude, says Innes.

The analyst also asserts that the economic recovery in China is not currently translating into an increase in demand for oil.

“The series of positive (Chinese) economic data reflects the more service-centric nature of the post-COVID-19 economic rebound,” he said, a sector which therefore has less impact on demand for crude in the country.

“Consumers are spending more in restaurants, but continue to save more as job concerns remain,” according to Stephen Innes, who argues that “not all China data has the same value “.


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