(London) Oil prices rose on Tuesday, with analysts banking on a recovery in demand during the summer season, which had already propelled crude prices the day before.
Around 10:30 a.m., the price of a barrel of North Sea Brent, for delivery in August, rose 0.88% to $84.99.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in July, gained 1.18% to $81.28.
“There is a growing belief that global oil stocks will soon start to fall, which should sustainably support oil prices in the second half of the year” due to “summer season demand,” Tamas told AFP Varga, PVM Energy analyst.
“After the impressive jump” on Monday, prices experienced temporary weakness at the start of the session driven by profit-taking, without starting the current upward trend, the analyst said.
On Monday, the price of Brent had already jumped by 1.97%, while that of WTI had risen by 2.40%.
At the start of Tuesday’s session, investors focused on the recent increase in American stocks, which was in the direction of a fall 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.
If the EIA report “shows declines across the board, that will be enough to push” prices back up, Varga said.
This analyst also notes the end of the surge in the dollar, which had been driven by the “weakness of the euro precipitated by the European parliamentary elections and by the progress of the French far-right party”.
In recent days, the markets have been worried about potential negative economic fallout in the event of a victory for the National Rally (RN) in the next legislative elections in France, while dissecting the left-wing union program of the New Popular Front.
Since black gold is denominated in dollars, a weaker greenback encourages oil purchases in foreign currencies, which tends to boost crude prices.
Another factor supporting prices, the Organization of the Petroleum Exporting Countries and its allies united in OPEC “has done everything to reassure the market” on the fact that it leaves itself the possibility of not reintroducing as planned the 2, 5 million barrels per day from this fall, if the market is in surplus, DNB analysts noted.
However, China’s National Bureau of Statistics (NBS) on Monday released data on crude oil processing by Chinese refineries for May, which reached 60.52 million tons or 14.3 million barrels per month. day, a slightly lower figure than the previous month, noted Commerzbank analyst 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)”, which translates into less crude imports, he added.
He infers that “the increase in Chinese global oil demand could be significantly lower this year.”
