The oil prices fell this Tuesday May 2 for the anxiety of the markets in relation to the US banking sector and the progress of the world economy.
A barrel of West Texas Intermediate (WTI), the benchmark for US crude, fell 5.3% to $71.66 in June contracts, its lowest price in more than a month. The barrel of Brent, for July, fell 5% to u$s75.32.
“Oil is being slaughtered due to concerns about regional banks in the United States”said Phil Flynn of Price Futures Group. After JPMorgan’s acquisition of First Republic bank on Monday, Wall Street took aim at Western Alliance and PacWest, which fell on Wall Street on Tuesday.
“Nothing about oil supply and demand matters when banks become a problem”observed Flynn, and recalled that black gold is among the most sensitive assets to turmoil in that sector.
“Things deteriorated much faster than what the agents expected” in the oil market, Edward Moya commented in a note. “Oil has entered a dangerous area”he continued, “as the banking crisis is damaging near-term economic prospects and raising fears of entering a recession sooner” than expected.
Source: Ambito
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