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Oil close to equilibrium, awaiting news of demand



(New York) Oil prices ended close to equilibrium on Wednesday, hesitating between the pleasant surprise of the weekly report on US inventories and questions about the health of demand in the context of a general economic slowdown.

The price of a barrel of Brent from the North Sea for delivery in March closed close to balance (-0.01%) at 86.12 dollars, as did the barrel of American West Texas Intermediate (WTI), also for March delivery (+0.02%), at $80.15.

Prices hesitated throughout the session, failing to find a clear direction.

According to Price Futures Group’s Phil Flynn, after a lackluster start, the market was nonetheless buoyed by figures from the US Energy Information Agency (EIA), which reported an increase of 500 000 barrels of crude inventories last week, while analysts expected triple (1.5 million).

This good surprise is partly attributable to the 14% drop in imports over one week, combined with the rise in crude exports (+21.5%).

The movement is also explained by the ramp-up of refineries, whose utilization rate reached 86.1%, against 85.3% the previous week.

After several weeks of disruption due to winter storm Elliott, which hit much of the United States at the end of December, refinery activity is on the way to normalization, even if many sites have since entered the usual maintenance phase. at this time of year.

If operators retained the relative surprise of crude stocks, the EIA report was, on the whole, “mixed”, qualified Phil Flynn.

Demand for refined products, in particular, is down 10.9% from its level last year over the same period.

This decline is particularly marked for distillates (-13.5%), which includes diesel, but also heating oil, the result of abnormally high temperatures for the season in many regions of the United States.

For Phil Flynn, the fact that crude oil prices have been moving within tight margins in recent days reflects a “consolidation, while waiting to have a better perception of the state of the economy”.

The market is also trying, according to him, “to measure the extent of the recovery of the Chinese economy”, which is not yet reflected in the indicators.

As for refined products, which had supported crude prices in recent weeks, “they were probably too high, too fast” and are subject to a correction, according to the analyst, also due to the lack of visibility. on request.

The US wholesale price of gasoline thus dropped 3.89% in two days and that of diesel, 8.34%.

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