Brent crude hit a three-month low on Tuesday as concerns over Credit Suisse spooked world markets, offsetting hopes of a recovery in Chinese oil demand. Here is a further explanation of the decline in Brent crude oil prices:

Brent Crude Oil Price Decline


Brent crude fell $1.21, or 1.6%, to $76.24 a barrel. U.S. West Texas Intermediate (WTI) crude fell $1.20, or 1.7%, to $70.13. The decline came after Credit Suisse said it was unable to provide Swiss banks with more financial assistance, which sent their shares and broader European stocks tumbling.

Return of Calm and Stability


Early signs of a return to calm and stability faded after largest investor Credit Suisse said it could not provide the Swiss bank with more financial assistance, sending its shares and broader European stocks tumbling. "Contagion concerns are clearly gaining traction," Tamas Varga of oil broker PVM told Reuters. "As a result, the dollar is stronger and equities are weakening – a bad sign for oil."

China's Oil Demand Recovery Hopes


Although concerns over Credit Suisse affected the world oil market, hopes of a recovery in oil demand from China provided support for oil prices. On Tuesday, oil prices fell more than 4% to a three-month low, pressured by concerns that the collapse of Silicon Valley Bank (SVB) last week and the failure of other U.S. banks could trigger a financial crisis that will weigh on fuel demand. However, Wednesday's monthly report from the International Energy Agency marked an expected boost to oil demand from China, a day after OPEC raised its forecast for Chinese demand for 2023.

Conclusion


Anxiety over Credit Suisse has frightened world markets, including the world oil market. Nonetheless, hopes of a recovery in oil demand from China provide support for oil prices. Investors and analysts will continue to pay attention to market developments and financial company policies that may affect the price of Brent crude oil. Get the latest news and articles from other GIC Indonesia, you can check on Google News every day to find out the latest updates about the world of forex to crypto. Also trade on GICTrade using an ECN account to enjoy trading with low spreads starting from zero!