Oil prices continues its decline, falling $1 on Tuesday, as the latest Silicon Valley Bank crisis caused turmoil in financial markets, and raises fears of a global financial crisis.
Brent crude futures declined by one percent, costing $79.95 per barrel, the lowest since January, while West Texas Intermediate (WTI) crude futures declined by 1.1 percent, costing $73.98 per barrel, the lowest since December, according to Reuters.
Oil prices has been under pressure as the Chinese economic recovery has been seeming weaker than expected.
“The market had previously expected a strong recovery of the Chinese economy, but the latest February inflation rate was only 1 percent year-on-year, reflecting the current deflationary state of the Chinese economy and weak demand,” said Leon Li, analyst at CMC Markets.
The American Petroleum Institute is expected to release industry data on U.S. oil inventories on Tuesday. Crude inventories have increased by 600,000 barrels until March 10, analysts estimated.
SVB crisis raised concerns about it leading to the fall of other banks, which is a result of the US Federal Reserve increasing interest rates throughout the past year. The crisis in the banking sector lead to traders not predicting a rate hike by the Fed next week.