(News Bulletin 247) – Oil prices are taking a breather on Monday, due to the latest statistics published in the United States which raise fears of weaker demand for black gold in the country. Profit-taking also explains this decline.
Oil prices lost ground on Monday as profit-taking and weaker-than-expected U.S. economic data released last week raised concerns about the country’s demand.
The price of a barrel of North Sea Brent crude for delivery in September fell by another 0.4% to $86.19. Its American equivalent, a barrel of West Texas Intermediate (WTI) crude for delivery in August, fell by another 0.5% to $82.74.
“Oil prices are under pressure due to growing concerns about demand from the US economy,” said Susannah Streeter, analyst at Hargreaves Lansdown.
With the slowdown in the US jobs market being “more pronounced than expected, we expect a slowdown in economic growth and a decline in the appetite for energy, after stronger demand over the summer,” Streeter explained.
For Tamas Varga, analyst at PVM Energy, if these more gloomy economic data increasingly suggest a first rate cut by the American central bank (Fed), “it remains to be seen whether it will occur in September”.
Profit taking after the rise
Tamas Varga also mentioned “profit-taking” by investors “which continues in the perspective (…) of the closure of Texas ports due to Hurricane Beryl.”
Supply problems appear to be still ongoing and could boost prices. Several coastal areas of Texas, a region with high oil activity, were evacuated due to flood warnings and power outages as Beryl approached, which regained strength overnight from Sunday to Monday, becoming a hurricane again.
Beryl is expected to make landfall between the port city of Corpus Christi and Galveston Island in the United States early Monday. The first hurricane of the Atlantic hurricane season, which runs from early June to late November, Beryl is unusually powerful.
Price movements in the coming days “could depend on the extent of the damage caused by the hurricane,” Energi Danmark analysts believe.
(With AFP)
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