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Tuesday, March 28, 2023

Oil collapses and was on the brink of falling below US$70 a barrel of WTI

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The price of oil collapses this Wednesday, March 15 and reaches US$70 for the West Texas Intermediate (WTI) US, its lowest value since December 2021. The Brent For its part, it follows it in the downward trend and touches US$76, its lowest value since December 2022.

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The crude Brent it fell $1.20, or 1.5%, to $76.24 a barrel. US crude oil futures West Texas Intermediate (WTI) it loses $1.14, or 1.6%, to $70.22.

On Tuesday, both benchmarks fell more than 4% to three-month lows.pressured by the fear that the bankruptcy of Silicon Valley Bank (SVB) last week and other bank failures in the United States they could unleash a new financial crisis that would weigh down the demand for fuel.

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This morning the financial crisis opened a new chapter and extended the fall of the global stock markets, pushed by the falls of the banks. European banks were pushed by the loss of Credit Suisse 20% in the value of their shares. Thus, the fall in assets and global financial entities unleashed on Friday of last week by the Silicon Valley Bank.

High inflation and investor concerns about high interest rates cloud the economic horizon and could pose risks to fuel demand, the IEA warned, adding that concerns about the health of the US banking sector also pose potential risks to lowers it

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The US inflation data published on Tuesday fed the expectation that the interest rate of that country will have a lower rise to what was previously expected, given their impact on the financial crisis. The Federal Reserve meeting will be next week.

However, this Wednesday, the latest monthly report from the International Energy Agency (IEA) pointed to a forthcoming increase in demand for oilor by China, while a day before OPEC increased its forecast of Chinese demand for 2023.

“Global oil demand growth started 2023 with a sigh, but forecast to end the year with a bangthe Paris-based agency said in its monthly oil report.

“The rebound in the use of fuel for planes and the resurgence of China will provoke a global increase of 3.2 million barrels per day (bpd) in the first and fourth quarters, the largest relative annual increase since 2010,” he added.

Oil supply continues to outpace relatively sluggish demandadded the IEA, but the market will balance towards the middle of the yearwith China and developing countries driving demand.

Real-time indicators of mobility in China mostly stabilized after the notable rebound in Januaryled by air traffic, with domestic flights already well above pre-pandemic levels,” the IEA noted.

For his part, commercial oil reserves of developed OECD countries reached their highest level in 18 monthsdue to declining demand and increasing reserves in Europe, before some Russian imports of crude oil and refined products were banned.


Source: Ambito

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