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Oil prices fell after the collapse of Silicon Valley Bank

14 March 2023

Oil prices fell in volatile trading on Monday as the collapse of Silicon Valley Bank hit equities markets and raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support, Reuters reports.

Brent crude futures were down 76 cents, or 0.9%, to $82.02 per barrel by 11:51 a.m. EDT (1551 GMT). The global benchmark earlier fell to a session low of $78.34, its lowest since early January.

U.S. West Texas Intermediate crude futures (WTI) fell 75 cents, or 1%, to $75.93 a barrel. WTI earlier dropped to $72.30 a barrel, its lowest since December. Fears of contagion from the failure of Silicon Valley Bank led to a sell-off in U.S. assets at the end of last week, while state regulators closed New York-based Signature Bank (SBNY.O) on Sunday.

U.S. stock indexes were mixed in choppy trading as investors weighed a possible pause in interest rate hikes by the Federal Reserve in March. U.S. authorities launched emergency measures on Sunday to shore up confidence in the banking system. The sudden shutdown of SVB Financial (SIVB.O) triggered concerns about risks to other banks from sharp rate hikes by the Fed over the last year, but has also spurred speculation about whether the central bank could slow the pace of its monetary tightening.

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