The price of crude oil continued to fall on Wednesday, with WTI trading at its lowest price since December 2021 on worries about the potential economic impact of the difficulties faced by Credit Suisse and other banks after the collapse of Silicon Valley Bank, AFP reported.
Brent North Sea crude for May delivery was 1.43% cheaper at $76.34 at 11:30 GMT (1:30 PM Romania), trading at its lowest level this year.
Its U.S. counterpart West Texas Intermediate (WTI) for April delivery fell 1.53% to $70.24 after hitting a 15-month low of $69.76.
Both global benchmarks fell by more than 8% this week.
The fallout from the bankruptcy of US Silicon Valley Bank (SVB) continues to “affect financial and oil markets”, prompting investors to turn to safe-haven assets, analysts at Energi Danmark say.
“The market is afraid of a recession and a drop in demand, which pushes prices down,” the cited experts added.
“The regional banking crisis in the USA suddenly turned into a European one”
On Wednesday, concerns about the state of the banks crystallized around Credit Suisse’s difficulties, with the largest shareholder, the National Bank of Saudi Arabia, ruling out any capital increase at the troubled bank.
“What started as a regional banking crisis in the US has suddenly turned into a European crisis,” IG analyst Chris Beauchem told AFP.
Oil opened the European session higher after an “avalanche of positive macroeconomic data” from China, the world’s biggest crude importer, said Stephen Brannock, an analyst at PVM Energy.
Retail sales in the country, a key indicator of household consumption, registered their first increase since September, signaling a return to activity after the lifting of anti-Covid restrictions.
DNB analysts also pointed to an increase in Chinese refinery output in January and February, as well as a recovery in fuel demand.
The American Petroleum Institute (API) estimated Tuesday evening that crude oil inventories rose by 1.155 million barrels last week, while gasoline inventories fell by nearly 4.587 million barrels.
However, API data is considered less reliable than EIA data. Analysts expected commercial crude oil inventories to rise by 1.5 million barrels and gasoline inventories to fall by 1.617 million barrels, according to a Bloomberg survey of analysts.
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Source: Hot News
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