Oil prices soared in New York on Friday, still buoyed by optimism returned to the stock market, as well as by renewed interest in heating oil due to a cold snap in Europe and North America.
The price of a barrel of “light sweet crude” (WTI) for delivery in March gained 2.66 dollars to 32.19 dollars on the New York Mercantile Exchange (Nymex), an increase of 9.01% for the day and 13.54% in two sessions.
In London, a barrel of Brent from the North Sea for delivery at the same deadline gained 2.93 dollars to 32.18 dollars on the Intercontinental Exchange (ICE), that is to say increases of respectively 10.02% and 15.42 % over one and two days.
The price of WTI and Brent have soared in the last 24 hours
“We are witnessing a significant rise in prices, due to comments (from the President of the European Central Bank Mario) Draghi (Thursday) and to the expectation of new economic stimulus measures”, supposed to push demand, explained Andy Lipow, at Lipow Oil Associates.
“We may not be completely out of the woods, but I think we are seeing a return of confidence,” said Phil Flynn of Price Futures Group.
“I don’t believe the 30% drop (in oil prices) that we saw at the start of the year was really justified by market fundamentals, as most of the bearish arguments should have been taken into account by now. counts in prices, ”he said, whether it is the Chinese economic slowdown or Iran’s return to the market.
In addition to these macroeconomic factors, which encouraged speculative investors to rebalance bets taken on falling prices, there was also a more circumstantial, and double-edged, element, namely the cold snap.
“But we consider this element to be very provisional,” said Tim Evans of Citi.
Especially since “in the United States, a large snowstorm on the east coast has canceled flights, which will reduce the consumption of kerosene. The snow will also limit gasoline consumption,” noted M Evans.
Meteorological data which will therefore weigh on demand while the supply is still very much in excess.
All in all, “the first quarter will remain very difficult” for the oil market, underlined Mr. Lipow: “it remains to be seen the beginning of Iranian crude oil exports”, after the lifting of the Western sanctions announced there one week, and this, “combined with refinery maintenance operations in the United States and Europe, will lead to an increase in crude stocks in the next two months”.
“To fully understand the oil market, there are two elements that play in the long term: the balance of power between the exporting countries and the fundamentals in terms of production. These two aspects have not changed, therefore, from my point of view. view, there is nothing to corroborate the hypothesis of a floor level, “also said Christopher Dembik, analyst at Saxo Bank.
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