Crude oil slips in early trade

14 Mar 2023 , 08:53 AM

Tuesday saw oil prices decline over the previous day as stock markets reacted negatively to Silicon Valley Bank’s bankruptcy and concerns about a new financial crisis increased.

Brent crude prices were down 9 cents to $80.68 per barrel. West Texas Intermediate (WTI) crude for the United States fell 16 cents to $74.64 a barrel. WTI sank to its lowest level since December on Monday, while Brent dipped to its lowest level since early January.

Concerns about dangers to other banks as a result of the U.S. Federal Reserve’s significant interest rate increases over the previous year were raised by SVB Financial’s abrupt closure. Also, it sparked conjecture regarding the possibility of a slowdown in the central bank’s monetary tightening.

When concerns about the demise of Silicon Valley Bank caused a sell-off in American assets at the end of last week and state regulators closed New York-based Signature Bank on Sunday, U.S. authorities took emergency measures to bolster trust in the banking system on Sunday.

The dollar index, which compares the value of the dollar to six other currencies, increased on Tuesday after falling for three straight days, reaching a low of almost one month on Monday. Oil prices are often supported by a weaker dollar since it makes oil cheaper for holders of foreign currencies.

On Tuesday, industry figures on U.S. oil inventories are anticipated to be made public by the American Petroleum Institute.

In the week leading up to March 10, oil stocks increased by an average of around 600,000 barrels, according to six analysts surveyed by Reuters. 

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