(New York) Oil ended slightly lower on Tuesday as a slow recovery in China, a stronger dollar and uncertainty about the global economy weighed on crude prices.
A barrel of Brent from the North Sea, for delivery in July, fell 0.42% to 74.91 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in June, fell 0.35% to 70.86 dollars.
“Crude prices are weighed down by the dollar which refuses to give in,” said Edward Moya, an analyst at Oanda, as the greenback climbed near its highest level in just over a month against the US. euro, at 1.0859 dollars for one euro around 4 p.m.
“There are too many question marks in the global economic outlook and that doesn’t give traders much confidence to buy crude,” the analyst added.
He said the oil market, where supply remains abundant for now, could tighten “as the United States begins to replenish its strategic reserves and China’s recovery unfolds.”
The US Department of Energy announced on Monday that it would begin buying back 3 million barrels which should be delivered in August.
For Andy Lipow of Lipow Oil Associates, on the other hand, the American takeover to reconstitute its strategic reserves (SPR) has “little chance of raising the price of crude”.
“For the month of August the United States will acquire 3 million barrels while during this same period the refiners process some 500 million barrels”, relativized the analyst, adding that the planet consumed more than 3 billion barrels in the month of August.
In addition, China on Tuesday published worse than expected economic indicators for April, against a backdrop of still weak demand, a sign of a jerky recovery since the lifting in December of strict restrictions against COVID-19.
Retail sales, the main indicator of household consumption, rose 18.4% year on year, a result lower than analysts’ forecasts. Industrial production also rose in April, but also less than analysts expected.
These weaker-than-expected Chinese economic data are forcing “oil investors to revise their forecasts for future oil demand from the world’s largest oil importer,” said Ricardo Evangelista, analyst at ActivTrades.