(New York) Oil prices fell slightly on Monday, caught between growing tensions in the market and the stimulus measures for the Chinese economy deemed insufficient, when European gas jumped again, pushed by threats of strikes in Australia .
A barrel of Brent from the North Sea, for delivery in October, fell 0.37% to 84.48 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in September, fell 0.65% to 80.72 dollars.
Prices, “initially helped by the more positive tone in equity markets” earlier in the session, lost momentum, commented Michael Hewson of CMC Markets.
“The prospect of a slowdown in China offsets the prospect of tighter markets,” he continues.
On the one hand, “demand appears to be rising in the United States, which the country’s declining inventory levels confirm, and expectations of lower production from Saudi Arabia and Russia” are pushing prices up. upwards, explain the analysts of Energi Danmark.
But on the other, worries about the health of China, the world’s largest crude importer, are capping oil’s gains. The economy of the country is scrutinized by investors, being linked to the level of demand.
On Monday, China cut the one-year interest rate from 3.55% to 3.45% to revive the economy by counting on more loans to individuals and businesses. The 5-year interest rate was kept stable at 4.2%.
For John Evans, analyst at PVM Energy, “this slight easing is unlikely to boost confidence” among investors and carry risky assets.
On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, ended at 39.98 euros per megawatt hour (MWh), up 9.8% after climbing to 42.90 euros per MWh.
“European gas prices rise again […] as strikes at Australian LNG (liquefied natural gas) facilities become more likely, with risk of global supply tightening,” comment DNB analysts .
A walkout “could begin […] as early as September 2 if no agreement is reached in wage negotiations with Woodside Energy,” DNB analysts said. Further discussions are expected to take place on Wednesday.