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Friday, March 31, 2023

Oil posted its biggest weekly drop in almost a year: it sank as much as 13%

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Oil prices fell this Friday, March 17, reversing initial gains of more than 1 dollar per barrel, and the fear of a broad crisis in the banking sector caused both reference contracts suffered their biggest weekly drops in months.

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crude oil futures Brent fell $1.73, or 2.3%, to $72.97 a barrel, while US West Texas Intermediate fell $1.61, or 2.4%, to $66.74.

At their session low, both lost more than $3. Brent plunged nearly 12% for the week, the biggest drop since December. WTI futures lost 13% from the close on Friday, in their worst week since April.

“The underlying fundamentals aren’t as dire as what’s trading here, but there are concerns that oil isn’t as safe as cash or gold,” said John Kilduff, a partner at Again Capital LLC in New York.

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Oil prices followed the bearish trail of equity markets, beset by the ccrisis in the banking sector and fear of a possible recession.

The three Wall Street indices fell sharply this Friday, pressured financial values, after the bankruptcy of Silicon Valley Bank (SVB) and Signature Bank and the problems of Credit Suisse and First Republic Bank.

Prices had regained some ground after support measures from the Swiss central bank and US lenders, but fell again when SVB Financial Group said it had filed for bankruptcy reorganization.

According to Ole Hansen, head of commodity strategy at Saxo Bank, the pressures were due to “continued market fragility.”

Analysts continue to expect tight global supply to support oil prices for the foreseeable future.

Source: Ambito

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