Crude oil prices continued to decline, today, Tuesday, March 14 (2023), for the second day in a row, as Brent crude fell by 1%, after declining at the close of trading yesterday, Monday, by more than 2.5%, after announcing the collapse of the “Silicon Valley” bank. American.
The collapse of the “Silicon Valley” Bank left negative effects on the stock markets, in addition to its contribution to strengthening fears about the possibility of a new global financial crisis, at a time when the world is witnessing a severe energy crisis, according to what was published by Reuters.
Crude oil prices fell sharply at the close of trading yesterday, Monday, March 13, to drop the benchmark Brent crude below $81 a barrel, according to information seen by the specialized energy platform.
Oil prices today
By 7:00 AM GMT (10:00 AM Mecca), Brent crude futures for May 2023 delivery fell 1%, to $79.9 a barrel.
US West Texas Intermediate crude futures, for April delivery, also fell by 82 cents, or 1.1%, to $73.98 a barrel.
Yesterday, Monday, the magnitude of the decline in Brent crude prices was the lowest since early January, while West Texas crude recorded its lowest level since December 2022, according to what was seen by the specialized energy platform.
The beginning of the collapse of some markets
With the expectations of energy market experts that crude oil prices will be affected by the crisis of the collapse of the American bank, the specialized energy platform polled the opinions of many specialists in this field, who revealed shocking expectations related to the future of the markets in the near term.
The advisor and expert in the field of energy in the Sultanate of Oman, former Director General of Marketing at the Omani Ministry of Energy and Minerals, Ali bin Abdullah Al Riyami, said that oil prices improved significantly at the end of last week, due to the improvement in oil demand in China and the decline in the US currency.
However, according to Al-Riyami, the collapse of Silicon Valley Bank, and after it some other banks, had a negative impact on crude oil prices, which fell by about $2 and a half to approximately $3. He expected prices to witness new declines, which may be limited, but will be the beginning of collapse for some markets. including the oil markets.
In turn, senior adviser on foreign policy and energy geopolitics, Omod Shukri, pointed out that there is a state of uncertainty regarding the future of oil prices during the coming years, explaining that there are several influencing factors that can contribute to better understanding of the future.
Shukry ruled out that oil prices would not drop by more than 5%, due to Chinese economic growth and high demand for oil, adding: “The main reason is the significant drop in fuel demand, due to the reduction in the size of technology companies, in addition to reducing the travel expenses of their employees.”
Panic in the oil markets
The founder of the “Vanda Insights” center on energy markets, Vandana Hari, saw that the collapse of the Silicon Valley bank resulted in reactions described as panic in the markets, which affected crude oil prices, noting that the repercussions of the crisis revived the crisis of Lehman Brothers.
In turn, the expert on energy and the Middle East, Cyril Woodershoven, said, in exclusive statements to the specialized energy platform, that some of them expect more Iranian oil to flow into the markets, but that will not happen during the current and next years.
He pointed out that economic concerns and inflation govern the determination of oil prices, so the crisis of the collapse of the Silicon Valley bank is just evidence that the financial data is not strong enough, in addition to the persistence of fears related to inflation, which he described as “a mixture that no one wants to drink.”
It is noteworthy that the Chinese Bureau of Statistics had issued data last week, revealing that consumer inflation in the second largest economy in the world slowed to the lowest rate in a year in February, as shoppers remained cautious even after the lifting of epidemic restrictions in late 2022.
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