LONDON, March 15 – Oil extended its slide on Wednesday, falling 4% to the lowest in more than a year as fears over Credit Suisse rocked global markets and offset hopes of a recovery in Chinese oil demand was recorded.
Early signs of a return to calm and stability faded, sending stocks and other European stocks lower after Credit Suisse’s biggest investor said it could not provide further financial support to Swiss banks.
Oil broker PVM’s Tamas Varga told Reuters: “Contagion fears are clearly gaining momentum. “The result is a stronger dollar and weaker equities, which bodes badly for oil.” Stated.
Brent crude fell $3.20 or 4.1% to $74.25 a barrel by 1333 GMT after reaching $74.01, its lowest since December 2021. Lowest since December 2021.
“Concerns about Credit Suisse and banks in general are weighing on sentiment,” Craig Earlam of brokerage OANDA told Reuters. “The outlook has suddenly become very uncertain, which is affecting oil prices in the short term.”
Oil had previously rebounded based on figures showing China’s economic activity rebounded in the first two months of 2023 after the end of strict Covid-19 containment measures.
Both benchmarks fell more than 4% to 3 or 3 on Tuesday on fears that last week’s Silicon Valley Bank (SVB) and other U.S. bank failures could spark a financial crisis that weighs on fuel demand. This is the lowest price in a month.
The International Energy Agency’s monthly report on Wednesday provided support by flagging an expected increase in oil demand from China, a day after OPEC raised its demand forecast for China in 2023.
Investors are now awaiting official U.S. oil inventories data later Wednesday to confirm the 1.2 million barrel increase in crude stockpiles reported by the American Petroleum Institute on Tuesday.