Closing price: Oil prices plummet over 5% as fears of demand slow down intensify

2023-10-04 21:30:00
Closing price: Oil prices ended down more than 5% on Wednesday, weighed down by American inventory figures and by the fear of seeing demand slow down. The price of a barrel of Brent BRENT Brent, or North Sea crude, is a variation of crude oil serving as a benchmark in Europe, listed on the InterContinentalExchange (ICE), a stock exchange specializing in energy trading. It became the first international standard for setting oil prices. from the North Sea for delivery in December fell by 5.62%, to close at 85.81 dollars.

As for the barrel of WTI WTI West Texas Intermediate (WTI), also called Texas Light Sweet, is a variation of crude oil that serves as a standard in setting the price of crude and as a raw material for oil futures contracts with the Nymex (New York Mercantile Exchange). ), the stock exchange specializing in energy. for delivery in November, it dropped 5.61%, to 84.22 dollars.

The two market reference varieties fell to their lowest level in a month.

????️ The fall in the price of black gold is linked to the weekly report from the American Energy Information Agency (EIA), which showed the lowest volume of gasoline deliveries to the United States in 25 years for this time of year.

This gap in what operators call implicit demand also explains the jump in gasoline stocks, which increased by 6.5 million barrels during the week ended September 29, while analysts expected them to be stable.

“Let’s wait until we see next week’s figures” to talk about a trend, said Phil Flynn, of Price Futures Group, who nevertheless recognized that this drop “had fueled anxiety about the economy”.

“Bond rates have risen suddenly” and “consumers are finding it more difficult” to maintain their purchases in this environment, added the analyst.

“Crude prices are taking the full brunt of fears of a global economic slowdown, despite production cuts promised by Riyadh and Moscow until the end of the year,” explained José Torres, of Interactive Brokers, in reference to commitments made by Saudi Arabia and Russia. to cut their volumes by 1.3 million barrels per day in total.

On Wednesday, at the end of its technical meeting, the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ agreement recommended maintaining current production levels.

For Phil Flynn, prices also suffered on Wednesday from information from the daily Kommersant, according to which the Russian government would consider lifting part of the restrictions on the export of diesel, decreed at the end of September.

“I doubt this information,” said Phil Flynn, recalling that the Deputy Prime Minister in charge of Energy, Alexandre Novak, had indicated on Tuesday that the suspension of exports of diesel and gasoline had made it possible to lower prices at the pump in Russia.

For Phil Flynn, Wednesday’s slide does not necessarily portend a prolonged correction. “The global market remains tight”, with supply significantly lower than demand. “And unless we see a major contraction in demand, this is going to remain a problem.”