US crude marks largest weekly loss since April 2022, Brent tumbles 12% this week

Economies.com
2023-03-17 20:23PM UTC

Oil prices slumped on Friday and extended recent losses due to ongoing concerns about the banking sector in the US and Europe. 

 

Analysts believe the fundamentals to remain solid for oil, but there are concerns oil isn't as safe in the turmoil  compared to something like gold or liquid cash.

 

Banking Sector

 

Credit Suisse received over 50 billion francs of loans from the Swiss National Bank, in addition to offers to repurchase loans, to improve its situation after causing a shock to the global financial system.

 

The largest shareholder in Credit Suisse said "everything is going alright", and it's unlikely for the bank to seek more capital.

 

The announcements came amid a frantic trading session due to concerns about the financial situation of the bank, which caused concerns to regulators worldwide.

 

International media said that JPMorgan Chase and Morgan Stanley are considering an intervention with liquidity support, and potentially an acquisition of the struggling First Republic bank.

 

The Federal Reserve also announced an emergency funding program to support struggling banks with liquidity.

 

Banking stocks continue to suffer, with First Republic bank collapsing by 21% despite liquidity support from other major US banks, while Credit Suisse stock fell by 6.3%.

 

Monitors are concerned such a crisis could lead to an economic recession in major economies, hurting demand on commodities.

 

By the close, Brent futures due in May fell 2.3%, or $1.73 to $72.97 a barrel, marking weekly loss of 12%, the largest since December 2022. 

 

US crude futures due in April slid 2.4%, or $1.61 to $66.74 a barrel, marking a hefty weekly loss of 13%, the largest since April 2022. 

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