Crude oil lower; set for largest weekly loss this year By Investing.com
Commodities 3 hours ago (Mar 17, 2023 10:03AM ET)
By Peter Nurse
Investing.com — Oil prices weakened Friday, heading towards steep weekly losses on concerns that the ongoing banking crisis will have a negative impact on the wider economy.
By 09:45 ET (13:45 GMT), U.S. crude futures traded 2.1% lower at $66.90 a barrel, while the Brent contract fell 2.1% to $73.11 a barrel. Both benchmarks are down over 11% this week, the largest weekly loss this year.
First Republic Bank’s (NYSE:FRC) stock was under pressure again in premarket trading on Friday, falling over 20%, despite receiving $30 billion from a group of major U.S. banks, while SVB Financial Group (NASDAQ:SIVB), the parent company of Silicon Valley Bank, has filed for Chapter 11 bankruptcy, a week after federal regulators were forced to rescue the bank with emergency measures.
In Europe, Credit Suisse (SIX:CSGN) stock slumped Friday, putting the lender on course for its worst weekly drop in three years, as investors questioned its future despite the Swiss National Bank (SIX:SNBN) offering a liquidity lifeline.
This banking sector turmoil has forced market participants to take a more conservative view of likely demand growth this year.
This comes despite the Organization for Economic Cooperation and Development stating Friday that the global economic outlook has improved from a few months ago.
The Paris-based organization raised its forecast for global growth to 2.6% this year from 2.2% in its last publication in November, citing a decline in energy and food prices and China’s easing of its anti-COVID restrictions.
“Broader market concerns related to the banking sector have weighed on risk assets, while oil is also seeing some soft fundamentals at the moment,” said analysts at ING, in a note.
The International Energy Agency increased its Russian supply estimate by 300 million barrels a day, in its latest monthly oil market report, stating that Russian exports have held up better than expected.
Additionally, “the current surplus environment has also meant that [U.S.] inventories have reached an 18-month high and the market is expected to remain in surplus over 1H23,” ING added.
The Baker Hughes rig count is due later in the session and may draw more attention than usual later after the U.S. government predicted that shale oil output is likely to top out in the spring.
The CFTC’s positioning data, meanwhile, are likely to reflect the liquidation of speculative long positions over the last week.
Crude oil lower; set for largest weekly loss this year
Terms And Conditions
(C) 2007-2023 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.