Crude Continues To Dive As Banking Worries Come To The Fore Again

Continued concerns in the banking sector, which spread across the Atlantic on Wednesday, weighed on oil prices and commodities in general. The market is worried that banking problems will result in slower growth and less demand for crude. WTI fell another 4.4% to finish at $68.23/bbl, its lowest since late December 2021, but is now trading a little higher at $68.35. Brent fell 4.1% and is now around $73.69. The USD index rose 0.9%.

• WTI reached a high of $72.56 early in the European session but then plummeted to a low of $65.65, it found support around $66. Brent’s high was $78.73 before dropping to $71.67. Oil moved off of its intraday lows following talks between Credit Suisse and the SNB and the statement that followed.
• The IEA warned in its monthly report that Russian output is likely to keep the market in surplus during H1 2023. It also said that global inventories are at their highest in 18 months as recession fears remain. Russia has continued to say that it will reduce output this year.
• The G7 and US President Biden said that they didn’t support the suggestion from some EU countries to reduce the Russian oil price cap below $60.
• Official EIA data showed a 1.55mn stock build of US crude but a gasoline drawdown of 2.06mn and distillate -2.54mn.