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Oil retreats, the market fears a suffocation of the economy



(New York) Oil prices ended lower on Thursday, operators still fearing the suffocation of the economy under the effect of excessive monetary tightening, without worrying, for the moment, market fundamentals .

The price of a barrel of Brent North Sea oil for May delivery fell 1.29% to close at $81.59.

A barrel of American West Texas Intermediate (WTI), due in April, fell 1.22% to 75.72 dollars.

Initially, prices left in the green after the release of data showing a higher than expected rise in new weekly jobless claims in the United States, raising hopes of a slowdown in the labor market.

“But people are still concerned about the U.S. jobs report” for February due Friday, which is seen as more meaningful in scope than the weekly numbers, which caused the market to turn around in late trading, Phil explained. Flynn of Price Futures Group.

A higher than expected number of job creations would bear witness to a still tight labor market and would confirm the US central bank (Fed) in its desire to push its monetary tightening much further.

“Right now, the market can be guided by macroeconomic factors” which give indications on the trajectory of the economy, continues the analyst.

In terms of the current balance between supply and demand, “the picture is rather favorable” for a rise in prices, according to him, but “in the short term, operators are still worried about the Fed”, whose investors are not exclude more that it pushes its key rate up to 6% this year and puts demand under pressure.

“The trend was guided by (Fed) Chairman Jerome Powell’s offensive comments during his parliamentary hearings” on Tuesday and Wednesday, Daniel Ghali of TD Securities said in a note.

For Phil Flynn, the spring should allow prices to break out of the relatively narrow range in which they have been evolving since the start of the year, with the expected acceleration in China and the end of the refinery maintenance period.

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