Oil prices settled lower Friday, reversing early gains of more than $1 a barrel as banking sector fears caused both benchmarks to reach their biggest weekly declines in months.
Brent crude futures settled down by $1.73, or 2.3 percent, to $72.97 a barrel. US West Texas Intermediate crude fell $1.61, or 2.4 percent, at $66.74.
At their session low, both benchmarks were down more than $3. Brent fell nearly by 12 percent in the week, its biggest weekly fall since December. WTI futures fell 13 percent since Friday’s close, its biggest since last April.
“The underlying fundamentals aren’t as terrible as what is being priced in here, but there is concern the oil is not as safe a place as cash or gold,” said John Kilduff, Partner at Again Capital LLC in New York.
Oil prices tracked equity markets lower, dogged by the banking sector crisis and worries about possible recession.
All three indexes were sharply lower in afternoon trading, with financial stocks .own the most among the major sectors of the S&P 500 following the collapse of Silicon Valley Bank (SVB) and Signature Bank and with trouble at Credit Suisse and First Republic Bank.
Prices had recovered some ground after support measures from the European Central Bank and US lenders, but dropped again when SVB Financial Group said it had filed for reorganization.
Pressure stemmed from “the continued fragile state of the market”, said Ole Hansen, head of commodity strategy at Saxo Bank. – Reuters
