(New York) Oil prices ended Wednesday at their lowest closing level since December 2021, battered by the upheavals in the banking and financial sector in Europe and the United States.
A barrel of Brent North Sea oil for May delivery fell 4.80% to end at $73.69. As for the American West Texas Intermediate (WTI), with maturity in April, it dropped 5.21%, to 67.61 dollars.
In session, the WTI fell to 65.65 dollars, a first for more than 15 months.
Since Friday, the American reference variety has melted by almost 12%.
After a day of respite on Tuesday, fears related to the banking sector again gripped the black gold market by the throat.
The bad wind this time came from Credit Suisse, pounded on the stock market and subject to doubts about its financial solidity. “This is a bank that matters and the risk of contagion (to the whole sector) is not going to dissipate anytime soon,” commented Edward Moya of Oanda in a note.
Soaring risk associated with banks “has heightened credit risk,” the granting of which could slow significantly, raising, in traders’ minds, “the possibility that the economy will decelerate sooner and much more sharply.” than expected,” said Bart Melek of TD Securities.
However, “commodities are often a harbinger of recession worries,” said Matt Smith of Kpler. “There is more and more fear for the economy and, suddenly, oil is falling. »
Investors see “direct parallels to past banking-driven recessions, particularly the 2008 financial crisis which has similar resonances to the current financial turmoil, a time when oil crashed,” said analyst Stephen Innes. of SPI AM.
During periods of high volatility, “investors tend to withdraw from risky assets like oil and invest in safer sectors,” thus favoring safe havens, says Giovanni Staunovo of UBS.
For Phil Flynn of Price Futures Group, “crude is hurting the most because a lot of the banks are exposed to oil, with the (industry) financings but also because a lot of them are trading” black gold on the steps.
The analyst explained that the slight end of the session jump, which allowed prices to recover from their lows, came after reports that the Swiss government was in discussions with Credit Suisse to try to find a solution to crisis.
In October, US President Joe Biden pledged that the United States would start buying oil on the market to replenish the country’s strategic reserves (SPR) if prices fell into a range between 67 and 72. dollars.
Asked by AFP about this, the US Department of Energy (DOE) did not respond immediately.
Matt Smith recalls that a law passed in Congress will force the United States to sell on the market, between April and June, some 26 million barrels, drawn from SPRs.
Therefore, “I do not see them saying that they are going to buy back barrels when everyone is preparing for them to sell them”, argues the analyst. “They’re going to wait until these sales are over to announce any buyouts,” pushing the deadline to summer.
Last cloud in the picture, Wednesday, the weekly report of the US Energy Information Agency (EIA), which reported a rise of 1.6 million barrels of commercial crude oil inventories in the United States. United.
This is the tenth increase in eleven weeks.
At the same time, demand for refined products emerged at a still weak level. Over four weeks, this indicator favored by analysts reached 19.6 million barrels per day, or 6% less than last year at the same time.
Mainly in question, distilled products, including diesel, down 12% compared to last year, and propane, whose demand is 24% lower than the same period of 2022.