The price of oil (WTI) below the threshold of 70 dollars

Crude prices have tumbled more than 8% since Monday

Around 11:30 a.m. GMT (12:30 p.m. in Paris), the barrel of Brent from the North Sea for delivery in May fell by 1.43%, to 76.34 dollars, thus moving to its lowest level of the year.

At the same time, its American equivalent, the barrel of West Texas Intermediate (WTI), for April delivery, fell 1.53% to $70.24. Even falling during the day to 69.76 dollars, a value unmatched for 15 months.

In the end, the prices of the two world references have fallen by more than 8% since the start of the week.

The bankruptcy of Silicon Valley Bank (SVB) impacts the markets

According to analysts, the repercussions of the bankruptcy of the American bank Silicon Valley Bank (SVB) continue to impact the financial and oil markets. Leading investors to turn primarily to safe havens.

The market fears above all the emergence of a serious banking crisis and a major recession, two factors likely to generate a drop in demand, which causes prices to fall.

From a US regional banking crisis to a European crisis

The vise is tightening now. What initially appeared to be “just” a US regional banking crisis suddenly turned into a European crisis, with Credit Suisse’s troubles worrying investors as the largest shareholder, Saudi National Bank, ruled out any rise in the capital of the bank in difficulty.

A positive start to the session

The session had started well after the publication of many positive macroeconomic data from China, the world’s largest importer of crude. The country’s retail sales, the main indicator of household consumption, thus recorded their first rebound since September, a sign of a recovery in activity since the lifting of the restrictive measures taken to fight against the Covid.

Analysts also recorded an increase in output from Chinese refineries in January and February, a sign of a recovery in fuel demand.

Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) had revised Chinese demand upwards in its monthly report.

Our opinion, by leblogauto.com

Banking crisis or simple fear?

In any case, even if the danger is not at our doorstep, the simple fact that investors are turning away from banking stocks, by itself creates a wind of panic with a snowball effect, self-feeding the crisis in a way… Raising fears of a recession, synonymous with a drop in demand, and therefore causing prices to fall.

Sources: AFP, Bloomberg