Oil closed this Tuesday with a rise of more than 2% and extending its recovery from the 15-month lows of the day before, since the Credit Suisse bailout eased fears about the risks in the global banking sector that could affect economic growth and the demand for fuel.
Measures to stabilize the banking sector, including the acquisition of Credit Suisse by UBS and the promises of the main central banks to increase liquidity, have calmed the fears about the financial system that hit the markets last week.
Fears of a banking crisis and a recession have subsided, highlighting the oil demand outlook at least for now.” said Fiona Cincotta, a financial markets analyst at City Index.
Brent crude closed up $1.53, or 2.07%, at $75.32 per barrel, and the US West Texas Intermediate (WTI) gained $1.69, or 2.5%, to $69.33.
The Federal Reserve began its two-day meeting on Tuesday. Markets expect an interest rate hike of 25 basis points, minus the 50 previously expected. Some leading central bank watchers have said the Fed could halt further rate hikes or delay the release of new economic forecasts.
The dollar index fell after hitting a five-week low in the previous session. A weaker greenback makes oil cheaper for holders of other currencies and therefore may increase demand.
A meeting of top OPEC+ ministers, which includes OPEC members plus Russia and other allies, is scheduled for April 3. OPEC+ sources told Reuters the drop in prices reflected banking fears, rather than a deterioration in the balance between supply and demand.
There will also be the latest reports on US oil inventories, which a Reuters poll expects to show crude and product stocks falling.
Source: Ambito
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