2023-07-05 06:38:03
Zurich (awp) – Oil prices retreated on Wednesday, giving up some of the gains made the day before. While the prices of black gold have alternated for several days up and down, investors continue to wonder about the evolution of the world economy, while Russia and Saudi Arabia reported declines on Tuesday of productions.
Around 7:45 a.m., a barrel of Brent from the North Sea, for delivery in September, yielded 0.62% to 75.77 dollars, after jumping Tuesday evening from 2.02% to 76.16 dollars. Its American equivalent, the barrel of West Texas Intermediate (WTI) for delivery in August, dropped 0.39% to 70.88 dollars, after a sharp rise of 2.13% to 71.28 dollars the previous evening. .
On Tuesday, two of the world’s top three crude producers, Saudi Arabia and Russia, announced cuts in their supply: a renewal in August of a limitation on extractions for the first, a drop in exports for the second. But after climbing in the wake of this announcement, prices fell back later in the session.
Craig Erlam, analyst at Oanda, sees in these hesitations a lack of appetite for oil on the part of investors. “The Saudi announcement was widely anticipated” given the lack of momentum in the oil market, comments Warren Patterson, analyst at ING, and if the Russian promise was unexpected, “there will be doubts about the application of the measure”.
Effect of a weaker recovery in China
“Russia says it cut production by 500 million barrels a day earlier in the year, but maritime exports remain at pre-war levels” in Ukraine, Erlam added.
“The uncertainties about the global economy” dominate the market for the moment, explains to AFP Ricardo Evangelista, analyst at ActivTrades. The demand for black gold could indeed suffer from a less marked recovery than expected in China and from the policies of the fight against inflation of the central banks which slow down growth throughout the world. And “in this context, the effect of announcements of lower production on prices is limited,” adds the expert.
A series of business surveys have highlighted weakening manufacturing activity in major economies, clouding the outlook for energy demand. Expectations that major central banks, including the US Federal Reserve (Fed) and European Central Bank (ECB), will raise interest rates further to reduce inflation, also weighed on market sentiment.
On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, took 4.37% to 35.41 euros per megawatt hour (MWh), a level below the two-month high of 42 euros per MWh reached the June 15, but well above the two-year low of 23 euros posted in early June. Investors weigh the prospects of firm supply against growing demand.
Surveys from Rystad Energy indicate that Europe is likely to reach its 90% gas storage target by early November, alleviating shortage fears as the continent’s second winter approaches. without key supplies from Russia. Meanwhile, production shutdowns at Norway’s gas fields for maintenance are set to end in mid-July, alleviating fears of a supply slump. Nevertheless, warm weather in Europe supported continental air conditioning demand and prices.
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