(New York) Oil prices resumed their fall on Tuesday weighed down by fears of an oversupply of crude, by a gloomy global economic outlook and by American inflation which is not slowing down so easily.
European gas continued its decline to its lowest level in almost three months.
The price of a barrel of Brent from the North Sea, for delivery in February, fell 3.66% to $73.24.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in January, lost 3.79% to $68.61.
The two global crude benchmarks thus fell to their lowest level since the end of June.
Inflation in the United States slowed over one year to 3.1% (CPI index), but regained strength over one month, in November, to 0.1% and 0.3% for inflation under -current, excluding food and energy.
“Inflation is certainly not slowing enough for the Fed to suggest the future possibility of a rate cut,” said John Kilduff of Again Capital.
The central bank concludes a monetary policy meeting on Wednesday where a status quo on rates is widely expected.
“But the market was hoping for more accommodating comments on the continuation of monetary policy” which may not happen given the tone of inflation, explained Mr. Kilduff.
Jerome Powell, head of the Fed, will hold a press conference on Wednesday at 2:30 p.m. Eastern.
At the same time, “with US production still high and concerns about the health of the Chinese economy, the short-term demand outlook appears uncertain,” underlines James Harte, analyst at Tickmill.
American crude production is in fact at a record level and the United States is “a major exporter of crude and refined products, which may be a problem for OPEC and the maintenance of prices,” recalled John Kilduff.
Investors are also worried about the acceleration of deflation in China in November, due to the fall in energy and food prices, according to official data published on Saturday by the National Bureau of Statistics (BES ).
For Tamas Varga, this is a “sign of sluggish demand from the world’s second largest economy.”
The two oil benchmarks have lost between 25 and 28% since their highs of the year, reached in late September, when Brent approached $100 a barrel.
On the European natural gas side, the Dutch TTF futures contract, considered the European benchmark, fell to 34,860 euros per megawatt hour (MWh), down 3.48%, after having touched 34,505 euros per MWh, its lowest price since September.
“Prices are dampened by the prospect of a prolonged period of mild temperatures,” comments Barbara Lambrecht, analyst at Commerzbank, recalling that heating is the main driver of demand during the winter months.
