NEW YORK: Oil prices rebounded and rose over 1% on Monday (March 20) after diving to their lowest levels in 15 months as the market worried that risks in the global banking sector could spark a recession that would sap fuel demand.
In volatile trade, Brent crude futures for May rose 82 cents, or 1.1% to US$73.79 (RM331.02) a barrel. US West Texas Intermediate crude futures for April gained 90 cents, or 1.4%, at US$67.64 (RM303.43) on the eve of the contract’s expiry. The more actively traded May futures rose 89 cents, or 1.3%, at US$67.82 a barrel.
Oil prices rebounded as Wall Street posted gains. Earlier, Brent and WTI fell about US$3 a barrel to the lowest since December 2021, with WTI sinking below US$65 a barrel at one point. Last week, both benchmarks shed more than 10% as the banking crisis deepened.
Oil’s early slide occurred despite an historic deal in which UBS, Switzerland’s largest bank, agreed to buy Credit Suisse in an attempt to rescue the country’s second-biggest bank.
After the deal was announced, the US Federal Reserve, European Central Bank and other major central banks pledged to enhance market liquidity and support other banks.
“There’s a lot of fear-based movement (in oil prices),” Price Futures Group analyst Phil Flynn said. “We’re not moving at all on supply and demand fundamentals, we’re just moving on the banking concerns.” – Reuters
