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Oil is retreating



(New York) Oil prices fell sharply on Tuesday, in a market anxious about a possible drop in demand, due to the health situation in China and hot weather in Europe and the United States.

The price of a barrel of Brent from the North Sea, for delivery in March, fell 4.43%, closing at 82.10 dollars.

The barrel of American West Texas intermediate (WTI), with maturity in February, fell 4.14% to 76.93 dollars.

“China’s impact is a hot topic in the market,” said John Kilduff of Again Capital. “Does this really represent a reopening, with a rebound in demand, or are they going to have to go through a very difficult phase first, which will affect demand? »

British firm Airfinity estimates that the coronavirus has claimed 161,800 lives in China since 1er December and predicts 1.7 million total deaths by April.

The Caixin PMI index of activity in China, published on Tuesday, stood at 49.0 points in December, against 49.4 points in November.

“The near-term picture for China’s economy is still bleak as it struggles with mountains of COVID-19 infections,” Duncan Wrigley of Pantheon Macroeconomics said in a note.

For John Kilduff, the heat wave that has hit Europe and part of the United States in recent days is also “really negative for demand”.

Thousands of temperature records have been broken in Europe, even in the East, with 19°C, particularly in Poland or the Czech Republic.

“And this should last at least until mid-January” in Europe, adds the analyst.

In another sign of a downturn in the energy market, the benchmark US natural gas futures contract fell below $4 per million British thermal units (BTU), the Anglo-Saxon benchmark for natural gas, on Tuesday. a first since the beginning of February 2022.

On the supply side, fears related to the European embargo on Russian oil and the price cap mechanism are fading.

“It seems that the Russians have managed to adapt” and continue to export their black gold, notes John Kilduff.

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