Oil prices fell 5% to their lowest level in more than a year as concerns over Credit Suisse spooked global markets and dashed hopes for a recovery in Chinese oil demand.
Writes about it Reuters.
The first signs of a return to calm and stability faded after major investor Credit Suisse said it could not provide additional financial assistance to the Swiss bank, which led to the fall of the bank’s shares and other European securities.
“We certainly see the oil market decoupled from oil stocks and we are more focused on a bigger crash in the global economy,” Price Futures Group analyst Phil Flynn said.
Brent crude fell $3.53, or 4.6%, to $73.92 a barrel by 1453 GMT.
US oil WTI (West Texas Intermediate) fell $3.46, or 4.9%, to $67.87. Both benchmarks hit their lowest levels since December 2021 and have been falling for three days in a row.
As of 18:00 Kyiv time, Brent was trading at $73.03 per barrel, WTI at $67.19.
According to Dennis Kissler, senior vice president of trading at BOK Financial, hedge funds are being liquidated due to rising interest rates and economic uncertainty.
The US dollar also strengthened against a basket of major currencies, making oil purchases more expensive for holders of those currencies.
Earlier, oil rose on data suggesting that economic activity in China picked up in the first two months of 2023 after the end of tough COVID-19 containment measures.
Meanwhile, U.S. oil inventories rose 1.6 million barrels in the week to March 10 to 480.1 million barrels, compared to analysts’ expectations in a Reuters poll for a rise of 1.2 million barrels.
Recall:
The head of the largest shareholder of the Credit Suisse group, the National Bank of Saudi Arabia, said he would not buy more shares of the Swiss bank for regulatory reasons.
Trading in Swiss bank shares was halted late this morning as they fell 20% to new record lows.
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