Oil prices fell today, Monday, to their lowest level in 15 months, amid fears that the global banking sector turmoil may lead to a recession that would lead to a decline in demand for oil, as well as fears of a possible hike in interest rates in the United States this week.
Brent crude futures for May settlement fell $2.32, or 3.2%, to $70.65 a barrel by 07:10 GMT. And contracts fell earlier to $ 70.56 a barrel, the lowest level since December 2021.
Brent fell last week by about 12%, the worst weekly performance since December.
US West Texas Intermediate crude for April delivery also fell $2.15, or 3.2%, to $64.59 a barrel. And it fell earlier to $ 64.51, and this was also its lowest level since December 2021.
West Texas crude fell nearly 13% last week, its worst weekly performance since April.
The trading of April contracts will end tomorrow, Tuesday, and the most traded futures contracts for May also fell by 3.2%, to $ 64.81 a barrel.
The drop in oil prices comes despite reaching a historic deal under which Swiss bank UBS will acquire Credit Suisse, the second largest bank in the country, in an effort to stem the spread of the banking crisis.
After the deal was announced, the US Federal Reserve, the European Central Bank and other major central banks pledged to boost market liquidity and support banks.
“The market’s focus is on the current volatility in the banking sector and on the potential for the Fed to raise interest rates,” said Baden-Moore, head of commodities research at the National Australia Bank.
Moore added, “The upcoming meeting of the Organization of the Petroleum Exporting Countries (OPEC) is another potential catalyst for market expectations. The downward trend in prices reinforces the possibility that OPEC will cut its production further to support prices.”
