Oil prices fell on Tuesday, caught between expectations of a recovery in Chinese demand, concerns about the global economy and a rise in rates and the dollar.
A barrel of Brent North Sea oil for April delivery fell 1.21% to $83.05. Its US equivalent, a barrel of West Texas Intermediate (WTI) for delivery in March, which is the last trading day, lost 0.23% to $76.16.
“There are continuous uncertainties about the global economy” and therefore about the demand for black gold, “between the rise in American interest rates, inflation that is far from appeasing and China whose return to activity is still uncertain,” he summarized. James Williams. of Economics WTRG.
China, the world’s largest importer of crude oil, abandoned its zero Covid policy since December, a very strict health policy that suffocated its economy. But since reopening, the country has been plagued by high levels of Covid-19 contamination.
Investors expect a recovery in crude oil consumption
And if “the general expectations of an increase in Chinese crude imports this year” have been pushing prices up for several months, “there has been no relevant fresh news” for the moment, recalls Tamas Varga of PVM Energy.
Investors are still waiting for concrete signs of a recovery in crude consumption. The oil market is also concerned about the state of the world economy, directly related to geopolitical risk and the Ukraine crisis.
“The new source of unpredictability has materialized in fears about inflation,” said Tamas Varga, recalling that most of the world’s main central banks continue to raise their reference rates in an attempt to curb the runaway rise in prices to the consumer.
For James Williams, “we have entered a bearish cycle and we are far from the December forecasts that had a barrel at 100 dollars.” The mild winter so far in Europe and to a lesser extent in the United States, as well as the strength of the dollar “are also part of the equation,” added the WTRG Economics analyst.
Source: BFM TV
