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Tuesday, March 21, 2023

Oil tested 2023 lows in the face of fear that bankruptcy generated banks in the US

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The oil prices fell more than 2% in a volatile session this Monday, since the collapse of Silicon Valley Bank rocked stock markets and raised fears of a new financial crisis, although the recovery in Chinese demand provided some support.

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oil futures Brentreference for Argentina, fell $2.01, or 2.4%, to $80.77 the barrel. The world reference contract it hit a session low of $78.34, its lowest price since early January.

U.S. West Texas Intermediate (WTI) crude futures were down $1.88, or 2.5%, at $74.80 a barrel. WTI previously fell to $72.30, a low since December.

US authorities took emergency measures on Sunday to bolster confidence in the banking system amid fears that the failure of Silicon Valley Bank would trigger contagion and a sell-off of US assets late last week. State regulators closed Signature Bank, which is based in New York, on Sunday.

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Wall Street also traded erratically as investors weighed a possible pause in interest rate hikes by the Federal Reserve in March.

The sudden shutdown of SVB Financial raised concerns about risks to other banks from the Fed’s sharp rate hikes over the past year, but also raised speculation that the central bank might slow the pace of its tightening.

The dollar index, which measures the US currency against six other currencies, fell nearly 1% as short-term Treasury yields plunged. A weaker dollar makes oil cheaper for holders of other currencies and generally supports oil prices.

Source: Ambito

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