(New York) Oil prices ended Wednesday at their lowest closing level since December 2021, exhausted by the upheavals which agitate the banking and financial sector, in Europe and the United States.
A barrel of Brent from the North Sea for delivery in May lost 4.80%, to end at 73.69 dollars. 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 took 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. “It is a bank that counts and the risk of contagion (to the whole sector) will not dissipate anytime soon,” commented, in a note, Edward Moya, of Oanda.
The surge in risk associated with banks “has heightened that associated with credit”, the granting of which could significantly slow down, which raises, in the minds of traders, “the possibility that the economy will decelerate sooner and much more clearly. than expected,” said Bart Melek of TD Securities.
However, “commodities are often a harbinger of concerns about a recession,” said Matt Smith of Kpler. “We fear more and more for the economy and, as a result, 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.
Crude most exposed
During periods of high volatility, “investors tend to withdraw from risky assets such as oil and invest in safer sectors”, thus favoring safe havens, explains Giovanni Staunovo, of UBS.
For Phil Flynn, of Price Futures Group, “crude is suffering the most because many banks are exposed to oil, with financing (to the industry) but also because many have trading activities” of 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 on this subject, 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 barrels while everyone is preparing for them to sell them”, argues the analyst. “They will wait for the end of these sales to announce any redemption”, which pushes the deadline to the 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 low 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.