New York (awp/afp) – Oil prices fell slightly on Friday, in the wake of a further fall in the New York stock market, but the trend remains sustained due to tensions between the United States and Russia on the situation in Ukraine.
Prices, which had fallen further during the session, regained some of the lost ground to conclude slightly down.
The price of a barrel of Brent from the North Sea for delivery in March dropped 0.55% to 87.89 dollars.
In New York, a barrel of West Texas Intermediate (WTI) for delivery in March, which is the first day of use as a benchmark contract, lost 0.47% to 85.14 dollars.
“Prices are being dragged down by what you see in the stock market,” said Andy Lipow of Lipow Oil Associate as Wall Street closed on another low and the Nasdaq was clearly in the correction zone.
But basically, the oil market is supported by tensions around Ukraine. “Even if the dialogue has resumed, nothing has been resolved and tensions persist,” commented Mr. Lipow.
A deterioration of the situation in Ukraine could raise concerns for the gas pipeline that crosses the country. “US sanctions on Russia could also limit Moscow’s ability to sell oil to Europe,” Lipow said.
The small increase in US oil inventories announced the day before also put a brake on the surge in prices since the start of the year.
“Oil prices fell on Friday after a meteoric rise since the beginning of the year, following the surprise increase in American inventories,” said Han Tan, an analyst at Exinity.
Weekly figures for oil inventories in the United States, published by the American Energy Information Agency (EIA), showed a slight increase after seven weeks of decline, where analysts expected a further drop in 1.75 million barrels.
“The question now is whether the correction will continue or whether the lower price level will be seen by market participants as a buying opportunity,” said Carsten Fritsch, an analyst at Commerzbank.
emb-vmt/tu/vgr