(London) Oil prices deepened their losses on Thursday, with American WTI losing more than 5%, weighed down by swelling inventories in the United States and economic signals raising fears for global demand.
At around 12:45 p.m. ET, a barrel of West Texas Intermediate (WTI) for December delivery fell 5.06% to $72.78, after hitting a record low of $72.73. since July.
Its European equivalent, a barrel of Brent from the North Sea for delivery in January, lost 4.82% to 77.27 dollars shortly after touching 77.20 dollars, also a lowest price since the beginning of July.
The two global benchmarks for black gold are thus moving to their lowest level in four months, under pressure “while disappointing American economic data have further darkened the outlook for demand”, explains Lukman Otunuga of FXTM to AFP. .
The day before, the report on the “swelling stocks” of oil in the United States and “fears of a slowdown in American economic growth” had already pulled prices down, recalls the analyst.
US commercial crude oil stocks increased by 3.6 million barrels, more than expected by analysts, according to figures released Wednesday by the US Energy Information Administration (EIA).
The market has also focused its attention on the level of reserves at Cushing (Oklahoma), the main WTI delivery terminal in the United States, which have increased significantly, according to DNB.
“The tight supply conditions that were widely expected have not materialized, as evidenced by the massive stockpiling in the United States,” comments Stephen Innes of SPI AM.
The inflation rate also fell significantly in October in the United States, to 3.2% year-on-year, compared to 3.7% in September, thanks in particular to the drop in gasoline prices at the pump, according to the CPI index published Tuesday.
These figures “following weaker than expected employment data at the start of the month, (have) reinforced the idea that the economy is starting to cool” in the country, underlines James Harte, analyst at Tickmill.
The market is now wondering whether Saudi Arabia and Russia, the de facto leaders of the OPEC alliance (the Organization of the Petroleum Exporting Countries and its allies) will intervene to stop the fall in prices.
Earlier this month, Saudi Arabia and Russia reaffirmed they would maintain their production and export cuts through the end of the year, cutting 300,000 barrels per day of oil and product supply oil tankers for Russia and a production cut of one million barrels per day for Saudi Arabia.
These reductions complement the reductions introduced since the beginning of May and in force until the end of 2024 by nine producers, including Riyadh, Moscow, Baghdad and Dubai, for a total of 1.6 million barrels daily.
“As we have seen so often in the past, producing (countries) will do whatever it takes to support prices,” says Oanda analyst Craig Erlam.
“It is now up to OPEC […] to give a firm message on what it wants to do in 2024 with regard to supply and prices,” says Bjarne Schieldrop, analyst at Seb interviewed by AFP.
The next ministerial meeting of OPEC members is scheduled for November 26 in Vienna, headquarters of the alliance.
