Oil prices slip almost 10% in week ending March 17

Oil prices fluctuated in a highly volatile market posting around 10% decline in the week ending March 17, over fears that a global banking crisis would weigh on the demand outlook.

International benchmark Brent crude was trading at $74.73 per barrel at 2.41 p.m. (1141 GMT) on Friday, posting a 9.52% fall from the Monday session that opened at $82.60 a barrel.

The American benchmark West Texas Intermediate (WTI) registered at $68.69 per barrel at the same time on Friday, decreasing 10.32% relative to the opening price of $76.60 a barrel on Monday.

Prices have posted their lowest level, trading near 15-month lows, with Brent trading between $71.67 a barrel and $83.48 a barrel, while WTI between $65.65 a barrel and $77.47 a barrel.

‘The drivers for the recent price declines are financial contagion risk and to some degree trader positioning,’ Bob McNally, the founder and president of US-based Rapidan Energy, told Anadolu.

Both benchmarks started the week on a bearish note on the back of a weak dollar after the sudden collapse of Silicon Valley Bank and Signature Bank.

Despite the US Administration’s efforts to assure the safety of the depositors’ assets, prices continued their decline through the week over investors’ worry about the spillover effect of the US banking sector crisis.

Intensifying these fears and putting further demand pressure on prices, Zurich-based banking company Credit Suisse announced it would borrow up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank after its shares drop by nearly %30.

Also, the ECB decision to increase its policy rate by 50 basis points to 3.5% on Thursday exerted some downward pressure on prices, increasing expectations for a similar move in the US.

However, prices experienced some upward movements with economic recovery expectations in China, the world’s largest oil importing country.

In its monthly oil report, the Organization of Petroleum Exporting Countries said China’s reopening following the lifting of the strict zero-COVID-19 policy, is expected to add considerable momentum to global economic growth.

A larger than expected rise in US oil inventories also added to downward pressures on oil prices.

US commercial crude oil inventories rose by around 1.6 million barrels to 480.1 million barrels during the week ending March 10, according to data released by the Energy Information Administration late Wednesday.

Market expectation was for an increase of 555,000 barrels.

• Oil prices fluctuated in a highly volatile market