Oil prices fell more than a dollar on Tuesday, extending losses for a second session, as the collapse of the Silicon Valley bank rattled stock markets and raised fears of a new financial crisis.

 Edited by Alexander Yoxina
Economic news - Castle Journal journalist
March 15, 2023 - Riyadh - SPA

    Brent crude futures fell 87 cents, or 1.1 percent, to $79.90 a barrel by 0345 GMT. West Texas Intermediate crude futures fell 85 cents, or 1.1 percent, to $73.93 a barrel. Yesterday, Brent fell to its lowest level since early January, while WTI fell to its lowest level since December.

The sudden closure of SVB Financial Group raised concerns about the risks faced by other banks due to the waves of sharp increases in interest rates approved by the US Federal Reserve over the past year. It also sparked speculation about whether the central bank would slow down the pace of monetary tightening.

US authorities launched emergency measures on Sunday to boost confidence in the banking system after fears of contagion from the collapse of the Silicon Valley bank led to a wave of selling in US assets at the end of last week, and regulators closed New York-based Signature Bank on Sunday.

Leon Lee, an analyst at CMC Markets, said that in addition to the repercussions of the Silicon Valley bank crisis, oil prices are also under pressure due to signs that the Chinese economy is recovering at a weaker-than-expected pace, despite the lifting of its strict restrictions related to the pandemic.

"The market was expecting a strong recovery of the Chinese economy, but the latest inflation figure in February was only 1 percent year on year, which reflects the current deflationary state of the Chinese economy and weak demand," he added.

The American Petroleum Institute is expected to release US oil inventory data on Tuesday.

Six analysts polled by Reuters expected an increase in US crude stocks by about 600,000 barrels in the week ending March 10.