(New York) Oil prices fell on Wednesday in a market that slowed U.S. gasoline consumption, as a member of the Biden administration said he hoped for a fresh gesture from Saudi Arabia.
Updated yesterday at 4:10pm.
The price of a barrel of Brent North Sea oil for delivery in August fell 1.45% to close at $116.26.
A barrel of West Texas Intermediate (WTI), also due to expire in August, fell 1.77% to $109.78.
Operators are marked by the slight decline in gasoline demand in the United States, which has been below the symbolic threshold of 9 million barrels per day for the past two weeks, according to figures published on Wednesday by the American agency Energy Information System (EIA).
Many analysts expect a slowdown in fuel consumption, which would result from historically high gasoline and diesel prices.
The small reversal seen in the last two weeks comes as the summer season has just started, traditionally leading to an acceleration in demand in the United States.
“It’s a little disappointing,” commented Phil Flynn of Price Futures Group, for which prices were also reacting to the ramp-up of US refineries, which are now using 95% of capacity, up from 93.7% there two weeks ago.
“It will be difficult to maintain this level of use,” estimates the analyst. “The more you spin at full speed, the more likely it is that something will go wrong,” he argued, amputating capacity just as badly.
For Phil Flynn, Wednesday’s long-rising doldrums also stemmed from crossing technical thresholds that acted as resistance factors.
As we approach the Fourth of July (US National Day) holiday weekend, “a lot of people are reducing their positions,” he explained.
The brokers also paid attention to statements by US State Department Energy Security Advisor Amos Hochstein, who said he hoped Saudi Arabia would make a fresh gesture to lower the black gold’s price.
The pledge last month by the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ deal to increase production more than expected is a “big shift in attitude,” the executive said in an interview with Bloomberg Television.
All observers expect the OPEC+ group to agree on an identical increase for August, or an additional 648,000 barrels per day, at Thursday’s meeting.
US President Joe Biden will visit Saudi Arabia in mid-July.
Several officials have given assurances in recent days that the kingdom has very little room left for additional use of its capacity.