Oil prices fell more than a dollar today, Tuesday, to extend their losses for the second session, as the collapse of the Silicon Valley Bank (Silicon Valley SVB) shocked the stock markets and raised fears of a new financial crisis.
Brent crude futures fell 1.1% to $79.90 a barrel by 03:45 GMT.
US West Texas Intermediate crude futures also fell 1.1%, to $73.93 a barrel.
Yesterday, Brent fell to its lowest level since early January, while West Texas Intermediate crude fell to its lowest level since last December.
The sudden closure of the “SVB” financial group raised concerns about the risks faced by other banks, due to the sharp waves of interest rate increases approved by the Federal Reserve (the US central bank) over the past year, and also raised speculation about whether The central bank will slow down the pace of monetary tightening.
And the US authorities launched emergency measures the day before yesterday, Sunday, to enhance confidence in the banking system, after fears of transmission of the collapse of the Silicon Valley bank caused a wave of selling in US assets at the end of last week, and the regulators closed Signature Bank - based in New York - the day before yesterday, Sunday.
Leon Lee, an analyst at CMC Markets, said that in addition to the repercussions of the Silicon Valley bank crisis, oil prices are under pressure due to signs that the Chinese economy is recovering at a weaker-than-expected pace, despite the lifting of its strict restrictions related to the pandemic.
"The market was expecting a strong recovery of the Chinese economy, but the latest inflation figures in February were only 1% on an annual basis, which reflects the current deflationary state of the Chinese economy and weak demand," he added.
The American Petroleum Institute is expected to release US oil inventories data on Tuesday.
And 6 analysts - in a Reuters poll - expected an increase in US crude stocks by about 600,000 barrels in the week ending on the tenth of March.