(London) Oil prices fell slightly on Tuesday, falling after their surge the day before, weighed down again by concerns about demand before a recovery expected by analysts.
Around 5:55 a.m. (Eastern time), the price of a barrel of North Sea Brent, for delivery in August, fell 0.20% to $84.08.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in July, fell 0.22% to 80.15 dollars.
“After the impressive jump” in prices yesterday, “the current weakness” in prices appears to be only a temporary reversal of prices from the current trend, driven by profit-taking, says Tamas Varga of PVM Energy, interviewed by AFP.
The previous day, the price of a barrel of Brent crude jumped by 1.97%, while that of WTI rose by 2.40%.
Furthermore, according to the analyst, the recent “increase in US inventories implies that summer demand has not yet kicked in”, which points to a drop in prices.
The evolution of prices will depend on the next figures on American reserves published Thursday by the American Energy Information Agency (EIA) instead of Wednesday, due to a public holiday in the United States.
“There is a growing belief that global oil inventories will soon begin to decline, which should sustainably support oil prices in the second half of the year,” says Varga, and if the EIA report “shows declines at all levels, this will be enough to raise the courses.
The dollar also stood out at the start of the session in the face of “the weakness of the euro precipitated by the European parliamentary elections and the progress of the French far-right party”, with the markets worrying about the potential economic fallout in the event of victory in the legislative elections, as noted by the analyst.
Since black gold is denominated in dollars, the strength of the greenback makes it more expensive and therefore discourages purchases of oil in foreign currencies, which tends to lower crude oil prices.
Separately, China’s National Bureau of Statistics (NBS) on Monday released data on crude oil processing by Chinese refineries for May, which stood at 60.52 million tons or 14.3 million barrels per day – a slightly lower figure than the previous month, notes Commerzbank’s Carsten Fritsch.
“Crude oil processing in China could therefore stagnate this year for the first time in two decades (with the exception of 2022, which was impacted by coronavirus lockdowns),” resulting in fewer imports crude, the analyst is alarmed.
He infers that “the increase in Chinese global oil demand could be significantly lower this year.”