Crude Oil Prices Slumps To More Than a Year

brent oil prices


Oil prices fell by 5% to their lowest level in more than a year as concerns about Credit Suisse frightened global markets and dampened hopes of a recovery in Chinese oil demand.

After Credit Suisse’s largest investor stated that it could not provide the Swiss bank with additional financial assistance, the Swiss bank’s shares and other European equities plunged.

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Phil Flynn, an analyst, stated, “We definitely have seen the oil market separate themselves from oil inventories and we’re more focused on a larger meltdown of the global economy.”

By 10:53 a.m. ET (14:53 GMT), Brent crude had dropped $3.53, or 4.6 percent, to $73.92 per barrel. US West Texas Moderate rough (WTI) was down $3.46, or 4.9%, at $67.87. Both benchmarks have fallen for three consecutive days, reaching their lowest levels since December 2021.

According to Dennis Kissler, senior vice president of trading at BOK Financial, rising interest rates and economic uncertainty were causing hedge funds to liquidate. Additionally, this morning’s intense pressure on US stocks was contributing to the liquidation of hedge funds in crude.

Additionally, a rise in the value of the US dollar against a basket of other currencies made it more expensive for holders of those currencies to buy crude.

Prior to the end of strict COVID-19 containment measures, figures showing that China’s economic activity picked up in the first two months of 2023 had pushed oil higher.

Meanwhile, US crude stockpiles increased by 1.6 million barrels to 480.1 million barrels in the week ending March 10, exceeding analysts’ expectations in a Reuters poll of 1.2 million barrels.

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According to market sources who cited American Petroleum Institute figures on Tuesday, crude stocks increased by approximately 1.2 million barrels during the week.

Due to concerns that the collapse of Silicon Valley Bank (SVB) and other US bank failures could set off a financial crisis that would impact fuel demand, both benchmarks had fallen by more than 4% on Tuesday to three-month lows.

The International Energy Agency’s monthly report on Wednesday provided support by indicating an anticipated rise in Chinese oil demand one day after OPEC raised its 2023 Chinese demand forecast.

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