Brent prices (reference oil for Angolan sales) for delivery and May ended the week accumulating losses of 12.45 percent, under the influence of market fears about the future of the financial sector after the collapse of Silicon Valley Bank (SVB) and Signature Bank, as well as the Credit Suisse liquidity crisis.
Last week, Brent ended the day down 2.32 percent to trade at $72.97 a barrel, while West Texas Intermediate (WTI, the benchmark for the United States) for April delivery ended with losses of 2.36 percent, at $66.74, accumulating a weekly drop of 13.26 percent.
The recorded losses send prices to April 2022, the lowest level in practically a year, according to Bloomberg.
“Oil prices took a hit the previous week as turmoil in the banking sector increased the risk of a significant economic slowdown or recession this year,” writes senior markets analyst at Oanda, Craig Erlam, in a note.
Even with the announcement of support for the banking system made by the Federal Reserve (Fed, American central bank) and, in Europe, by the Swiss National Bank (SNB) for Credit Suisse, caution continues to dominate investor sentiment.
“Clearly, investors are not convinced that the worst is over, which continues to weigh heavily on the WTI price, especially on a weekend where anything can happen, as we saw seven days ago. , oil prices could recover and a quiet weekend could be the first step towards that”, completes Erlam.
In one year, since it reached its peak, on March 8, 2022, the price of Brent has depreciated by 33.47 percent. This evolution can scare investors, since, in theory, the drop in the price of raw materials harms the cash and dividends of oil companies.
The good news is that, according to research analyst at Ativa Investimentos Ilan Arbetman, the barrel price of Brent will not fall further, given China’s expansion policies.
In addition, depending on the political and economic situation, since the war in Ukraine is not over and oil companies are looking for more ecological operations, there are chances of an increase in oil prices in the coming months, due to a weak supply in the market, experts believe.
