New York (awp / afp) – Oil prices fell again on Monday, weighed down by the rise in the dollar, fears of an economic slowdown in China and the impact of new stringent health restrictions still in place.
The price of the North Sea Brent barrel for December delivery, of which it was the last day of trading, fell 0.98% to close at $ 94.83.
The barrel of American West Texas Intermediate (WTI) for same month delivery lost 1.55%, to $ 86.53.
“After two consecutive weeks of gains buoyed by record US oil exports last week, Brent and WTI are under pressure,” said Interactive Investor’s Victoria Scholar.
“Covid-19 restrictions in China are widening, raising concerns about slowing demand from the world’s second largest oil-consuming economy,” the analyst said.
China is the latest major economy to apply a strict anti-Covid policy, which involves repeated blockades, many of which are currently underway.
And this, “despite its negative impact on the Chinese economy, with clear signs of a slowdown that is already taking shape”, insists Victoria Scholar.
Manufacturing activity in China contracted again in October after a brief rebound in September, due to health restrictions affecting the activity, according to official data released on Monday.
The rise in the greenback also weighed on crude oil, which is traded in dollars. Its appreciation reduces the purchasing power of investors using foreign currencies, and therefore the demand.
“Prices have gone up last week thanks to the dollar’s drop and it’s recovering there, so it’s weighing on prices,” said John Kilduff of Again Capital.
Despite the weight of China and the dollar, black gold held up, particularly thanks to the rhetorical escalation between the United States and Saudi Arabia.
“We are not accountable to anyone but ourselves,” Prince Abelaziz bin Salman, Saudi Minister of Energy, whose country is considered the most influential in the Organization of the Petroleum Exporting Countries (OPEC), said Monday at a conference. Abu Dhabi.
From Tuesday, the two million barrels per day reduction in production decided at the beginning of the month by OPEC and its allies of the OPEC + agreement should come into effect.
Energy prices must be set at a level that allows the economy to grow, otherwise they will “accelerate a downturn in economic conditions,” which would cause oil demand to drop, replied Amos Hochstein, adviser to US President Joe. Biden for energy issues.
Oil prices have also been spurred by statements from Joe Biden, who called on energy groups to lower prices and increase production, failing that suggests Congress imposes a one-off tax on super-profits.
“It causes consternation”, according to John Kilduff, for whom “it can only drive prices up, because the reaction (of the oil companies to a tax) would be to slow down exploration and drilling. And it is also a new attack on l ‘ industry.”
emb-tu / cc