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Oil stalls | The Press



(New York) Oil prices ended sharply lower on Monday, in a market fearful of seeing the turmoil hitting the banking sector stall the economy and contract demand for black gold.

The price of a barrel of Brent North Sea oil for May delivery dropped 2.42%, to close at $80.77. In session, Brent fell to 78.34 dollars, the lowest since early January.

As for the barrel of American West Texas Intermediate (WTI), with maturity in April, it dropped 2.45%, to 74.80 dollars.

Closed this weekend as the crisis hitting several American banks accelerated, the oil market reopened in a feverish state and prices fell from the outset.

“Nothing has changed in terms of market fundamentals, but it’s still save who can,” commented Stephen Schork, analyst and author of the Schork Report. Operators “are worried about a new bank panic. We know the song. In the past, this has led to deep recessions and this is a source of concern at the moment. »

“Tougher financial conditions are weighing on crude prices and driving selling, which could push prices to the bottom of the range in which they have been moving recently,” observed Daniel Ghali of TD Securities in a note.

For the analyst, the tensions that the financial system is experiencing are even likely to bring out, downwards, the barrel of the tight margins in which it has been evolving for three months, ie between 72 and 82 dollars for the WTI.

“Oil prices have been at half mast since operators were disappointed by China’s moderate growth forecast,” said Edward Moya of Oanda in a note.

For Stephen Schork, the fact that inflation remains high does not allow the American central bank (Fed) to stop its rate hikes, as the turbulence in the banking sector would justify.

Traders therefore fear that the Fed will be forced to go further in its monetary tightening, at the risk of further suffocating the US economy and lowering demand for oil.

The US government on Monday approved ConocoPhillips’ giant Willow project in northwest Alaska, despite pressure from environmental groups. The site could produce an estimated 576 million barrels over approximately 30 years.

“It’s a long-term project,” which had no impact on prices, said Stephen Schork.

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