On March 14th, crude oil futures closed at a three-month low as investors continued to worry about the impact of a banking crisis in the US on the economy and demand for oil.
- WTI crude futures dropped by $3.47, or 4.6%, to settle at $71.33 a barrel.
- Brent crude futures dropped by $3.32, or 4.1%, to settle at $77.45 a barrel.
Both contracts closed at their lowest since December 9th, 2022, and had their worst single-day drop since early January of this year.
Investors are concerned that the bankruptcy of Silicon Valley Bank (SVB) and Signature Bank (SB) could destabilize the banking sector and the US economy. Although President Joe Biden, US leaders, and government agencies around the world have pledged to contain the crisis, investors remain apprehensive about the potential for further fallout.
Moody’s Investors Service, the US credit rating agency, recently downgraded its outlook on the US banking system from “stable” to “negative” due to the sharp deterioration in the operating environment. After the incident, customers flocked to withdraw deposits at Silicon Valley Bank, Silver Gate Bank, and Signature Bank.
Investors are now waiting for the US crude stock report. The US Energy Information Administration (EIA) will release the information today, and analysts expect crude inventories to have risen by 600,000 barrels last week. The results of the report could further impact oil prices and investor sentiment in the coming days.
The Spot Market is Open
Wednesday, March 15, 2023