Oil prices fell on Wednesday in a market that the slowdown in gasoline consumption in the United States made tick, while a member of the Biden government said he hoped for a new gesture from Saudi Arabia. The price of a barrel of Brent North Sea oil for August delivery fell 1.45% to close at $116.26. A barrel of West Texas Intermediate (WTI), also expiring in August, fell 1.77% to 109.78 dollars. Operators have been marked by the slight decline in demand for gasoline in the United States, which has come out below the symbolic threshold of 9 million barrels per day for the past two weeks, according to figures published on Wednesday by the Agency. American Energy Information Agency (EIA).
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Many analysts are watching for a slowdown in fuel consumption, which would result from the historically high level of gasoline and diesel prices. The small inflection recorded over the past two weeks comes as the summer season has just started, which traditionally sees demand accelerate in the United States. “It’s a bit of a disappointment”commented Phil Flynn, of Price Futures Group, for whom prices also reacted to the ramping up of American refineries, which now use 95% of their capacity, against 93.7% two weeks ago. “It will be difficult to maintain these levels” of use, estimated the analyst. “The harder you rev, the more the likelihood of an incident increases,” he argued, which would amputate the capacities of as much.
For Phil Flynn, the slack in prices, which had long been on the rise on Wednesday, is also, in part, attributable to the crossing of technical thresholds, which acted as resistance factors. In addition, as we approach the 4th of July holiday weekend (US National Day), “a lot of people are reducing their positions”, he explained. Traders also paid attention to statements by the US State Department’s energy security adviser, Amos Hochstein, who said he hoped Saudi Arabia would make another move to relieve oil prices.
Last month’s commitment by the Organization of the Petroleum Exporting Countries (OPEC) and its OPEC+ allies to raise production more than expected was a “major attitude change”, the official said in an interview with Bloomberg Television. All observers expect the OPEC + group to agree on an identical increase for August, or 648,000 additional barrels per day, at its meeting on Thursday. US President Joe Biden is due to visit Saudi Arabia in mid-July. Several officials have assured, in recent days, that the kingdom now only has a very small margin for additional use of its capacities.
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