Crude oil prices continued to fall today, with a barrel of WTI trading at its lowest price since December 2021 on concerns over the potential impact of Credit Suisse difficulties following the SVB collapse.
At 11:30 AM in Lisbon, North Sea Brent crude for May delivery was down 1.43% to trade at $76.34 at the lowest level of the year.
US counterpart West Texas Intermediate (WTI), for April delivery, fell 1.53% to $70.24, shortly after reaching $69.76, a 15-month low.
Prices of both global benchmarks fell by more than 8% in one week.
The repercussions of the bankruptcy of the American bank Silicon Valley Bank (SVB) continue to “affect financial markets and the oil market”, say analysts at Energi Danmark quoted by AFP, putting pressure on investors to favor safe havens.
“The market fears a recession and a drop in demand is pushing prices down”, they say.
Today, concerns about the banks’ plight have crystallized around struggling Credit Suisse, as the biggest shareholder, Saudi National Bank, has ruled out any capital increase in the struggling bank.
“What started out as a regional banking crisis in the US has suddenly turned into a European crisis,” Chris Beauchamp, an analyst at IG, told AFP.
Oil had started the European session higher after “a flurry of positive macroeconomic data” from China, the world’s biggest importer of crude, said Stephen Brennock, an analyst at PVM Energy.
The country’s retail sales, the main indicator of domestic consumption, recorded the first recovery since September, a sign of a recovery in activity since the lifting of anti-covid restrictions.
DNB analysts also pointed to an increase in Chinese refinery production in January and February, also indicating a recovery in fuel demand.
On Tuesday, the Organization of Petroleum Exporting Countries (OPEC) revised upwards Chinese demand in its monthly report.