Oil futures: Crude slides further as banking jitters return
Quantum Commodity Intelligence - Crude oil futures Friday were again coming under strong downwards pressure as the support package agreed late Thursday for First Republic Bank provided only temporary relief.
May ICE Brent futures were trading at $73.15/b (1755 GMT) compared to the day's range of $71.40-$75.92/b and Thursday's settle of $74.79/b, down around 11.5% on the week.
At the same time, Apr23 NYMEX WTI was trading $66.99/b versus Thursday's settle of $68.35/b, as crude benchmarks again tested 15-month lows.
Nearly a dozen of the largest US banks have deposited $30 billion into First Republic Bank in an effort to stabilise the lender's balance sheet after its share prices plunged following the SVB failure, bank regulators announced Thursday.
"The actions of America's largest banks reflect their confidence in the country's banking system. Together, we are deploying our financial strength and liquidity into the larger system, where it is needed the most," the 11 banks behind the deal said in a joint release.
However, markets remain cautious, with analysts saying it was too early to call an end to the banking crisis, while the broader economy has been left reeling.
"While the oil price collapse of the past week has been driven by a huge risk-off move from financial markets, oil market fundamentals have also become a bit more bearish. Stocks are rising faster than previously thought, and the forecast for demand growth is looking more uncertain," said energy consultants FGE in a client report.
Crude markets largely shrugged off oil fundamentals this week, including upbeat forecasts from the IEA and OPEC on China's demand growth, while domestic data was also seen supportive for consumption.
"Arguably the most important global story that went unnoticed because of the Credit Suisse saga: China's new home prices snapped a 17-month deflation streak in February," said Stephen Innes, managing partner SPI Asset Management.
The average price of a new home in 70 medium and large cities in mainland China edged up 0.3 per cent in February, after staying flat in January, according to the National Bureau of Statistics.
Oil prices also failed to react after senior government officials of Saudi Arabia and Russia reaffirmed their commitment to the OPEC+ production cut until the end of 2023, following a meeting between Energy Minister Prince Abdulaziz bin Salman and Alexander Novak, Deputy Prime Minister of Russia.