Oil prices resisted on Monday despite the rise of the dollar and the rout of stock markets, weighed down by fears of economic recession and galloping inflation in major crude-consuming countries such as the United States.
Brent crude from the North Sea for August delivery climbed 0.21% to $122.27.
A barrel of US West Texas Intermediate (WTI) for July delivery also rose 0.21% to 120.93 dollars.
“Crude is the only thing in the world that stayed up today, everything else is down,” noted analyst Matt Smith for Kpler.
“A vicious cycle of selling engulfed the markets and yet oil held on,” the analyst said, noting that it showed “how tight the supply of crude is.”
“We could have found reasons to sell, especially with the possibility of new confinements in China, but these would not be a surprise because we know the Chinese policy of zero tolerance vis-à-vis the Covid”, he said. -he adds.
Beijing launched yet another general screening in the most populous downtown district of the Chinese capital on Monday, after an epidemic resurgence which led to the return of anti-Covid-19 restrictions.
“The hope of a rapid and complete return to normal in oil demand after the lifting of containment measures in China, the world’s second largest consumer of oil, has therefore turned out to be premature”, commented for his part Carsten Fritsch. , of Commerzbank.
“We will have to expect an uneven rebound in demand in China,” added the Kpler specialist.
Crude prices held up, “showing the strength of the market despite all the headwinds,” he added.
Consumer prices resumed their escalation in May in the United States, breaking a new high in 40 years. Over twelve months, inflation is galloping to 8.6%, against 8.3% the previous month.
Faced with this inflation, which has become Joe Biden’s economic priority, the American central bank (Fed) is preparing to raise its key rates on Wednesday for the third time this year, and could accelerate the movement.
A much higher increase in interest rates combined with a recession “would also affect the demand for oil in the largest consumer country in the world”, worried Mr. Fritsch.
“Containing inflation by almost any means necessary is now the most important task for fiscal and monetary policymakers,” said Tamas Varga, analyst at PVM Energy.
“It will come at the expense of economic growth, which will inevitably destroy demand for oil,” he said.
bur-emb-vmt / jul / er
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