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Monday, March 27, 2023

Oil extends its losses and falls for the fourth consecutive day

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Oil prices extend their slide this Thursday, March 16 and are trading at their lows since mid-2021, while markets are trading relatively calmly a bit after Credit Suisse received a financial lifeline of the Swiss regulators.

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However, market sentiment remained fragile, weighed down by fears of increased stress on banks around the world, and the two main crude oil benchmarks fell.

The futures of brent lose 28 cents, or 0.4%, to $73.35 a barrel, its lowest since Dec. 20, 2021.

He West Texas Intermediate in the United States (WTI) fell 31 cents, or 0.5%, to $67.33, its lowest value since August 2021.

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On Wednesday, the third consecutive day of declines, WTI fell below $70 for the first time since December 20, 2021. He Brent has lost almost a 10% since the close on Friday and WTI, close to 11%.

“Oil fell below $70 a barrel amid fears of a second financial crisis hurting demand prospects,” he said. Fiona Cincotta, City Index analyst. “Market sentiment has improved today after Credit Suisse received a financial lifeline.”

Credit Suisse said Thursday that will borrow up to 54,000 million dollars from the Swiss central bank to shore up its liquidity and investor confidence after falling shares intensified fears of a global financial crisis.

These fears could displace inflationary concerns when European Central Bank policymakers meet on Thursday, possibly forcing them to scrap plans for a sharp interest rate hike that could slow economic growth and dampen oil demand.

The OPEC+ considers that the fall in oil prices this week to lows of more than a year is due to financial fears and not an imbalance between supply and demandand expects the market to stabilize, four delegates from the grower group told Reuters.

“It’s a purely financial issue and has nothing to do with oil supply and demand,” said one of the delegates, who asked not to be named. OPEC+ will most likely “wait and see” in the hope that the situation will “normalise soon”.

Source: Ambito

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