Published: March 16, 2023 at 8:00 am ET
Oil futures traded lower on Thursday, unable to shake recession concerns after the US benchmark closed below $70 a barrel for the first time since December 2021.
price action
market leader
Crude oil prices gave up a modest rebound after troubled lender Credit Suisse said it would tap a $54 billion lifeline from the Swiss National Bank and launch a debt buyback bid. Concerns over Credit Suisse sent another wave of shockwaves through financial markets already rocked by US regional bank concerns.
Analysts…
Oil futures traded lower on Thursday, unable to shake recession concerns after the US benchmark closed below $70 a barrel for the first time since December 2021.
price action
- West Texas Intermediate crude for April delivery
CL.1
CL00
CLJ23
on the New York Mercantile Exchange fell 22 cents, or 0.3%, to $67.39 a barrel after Wednesday recording the lowest close for a front-month contract since December 3, 2021.
- May Brent Crude Oil
BRN00
BRNK23
,
the global benchmark, ICE Futures Europe fell 15 cents, or 0.2%, to $73.54 a barrel after closing at its lowest level since December 20, 2021 on Wednesday. - Back on Nymex, April Gasoline
RBJ23
fell 0.2% to $2.434 a gallon as April delivered heating oil
HOJ23
fell 1.9% to $2.558 per gallon.
- April natural gas futures
NGJ23
rose 2.5% to $2.50 per million British thermal units.
market leader
Crude oil prices gave up a modest rebound after troubled lender Credit Suisse said it would tap a $54 billion lifeline from the Swiss National Bank and launch a debt buyback bid. Concerns over Credit Suisse sent another wave of shockwaves through financial markets already rocked by US regional bank concerns.
Analysts said fears that reduced lending by US and European banks will prompt a recession helped accelerate oil’s sell-off on Wednesday.
“The roller coaster ride of oil volatility should come as a surprise to few in the market, especially those of us who have weathered the early days of the pandemic with white knuckles know that risk asset correlations tend to narrow drastically during times of turmoil,” said Michael Tran , commodity strategist at RBC Capital Markets, in a note.
“Fundamentals have been weak, but WTI’s decline to the mid-$60s (a barrel) is what our models see as fair value for a major recession like 2008,” he wrote. “The headlines of the past week draw eerie parallels to the early days of the Great Financial Crisis, but the recent market retracement feels excessive unless a 2008-style contagion runs rampant.”
Data on US natural gas storage from the Energy Information Administration is due Thursday morning. Analysts polled by S&P Global Commodity Insights, on average, expect the EIA to report a withdrawal of 84 billion cubic feet for the week ended March 3rd.
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