Oil extends fall after California’s SVB collapse raised fears about economic growth


Oil futures fell Tuesday, extending the previous session’s decline after the collapse of California’s Silicon Valley Bank on Friday stirred worries of a U.S. regional banking crisis and a potential hit to economic growth.

Price action
  • West Texas Intermediate crude for April delivery


    fell $1.28, or 1.7%, to $73.52 a barrel on the New York Mercantile Exchange.

  • May Brent crude

    was down $1.12, or 1.4%, at $79.65 a barrel on ICE Futures Europe.

  • Back on Nymex, April gasoline
    dropped 0.2% to $2.586 a ballon, while April heating oil
    was little changed at $2.763 a gallon.

  • April natural gas
    was up 0.2% at $2.612 per million British thermal units.

Market drivers

Crude fell sharply Monday, while equities saw a choppy session that saw major U.S. indexes end mostly lower. Oil was extending its decline Tuesday as stock-index futures pointed to a bounce for Wall Street.

“Looking ahead, the supply side of current fundamental backdrop remains fairly steady; however, fading optimism surrounding China’s economic recovery and still-elevated recession fears are leaving risks skewed to the downside,” wrote analysts at Sevens Report Research in a Tuesday note.

On the charts, WTI is still rangebound between support at the year-to-date low near $73 and resistance at the 2023 highs of $82 a barrel, they wrote.

The Organization of the Petroleum Exporting Countries, in its monthly report, left its forecast for demand in global oil-demand growth in 2023 unchanged at 2.3 million barrels a day to 101.9 million barrels a day.

OPEC said expectations for growth in demand from China was offset by revisions lower for the U.S. and Europe.




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