Oil prices rose 1% on Friday after a meeting between Saudi Arabia and Russia, but crude benchmarks were still set to fall for the second week in a row after a banking crisis triggered a sell-off in global financial markets this week.
By 11.08 a.m. (Bangkok time), Brent oil futures gained 79 cents, taking the price to $75.49 per barrel, reversing a three-day losing streak and closing 1.4% higher on Thursday. US West Texas Intermediate crude was trading at $69.09 a barrel, up 74 cents from the previous session’s close of 1.1% higher.
This week saw the lowest prices for both contracts in almost a year, and both are expected to suffer their largest weekly drops since December, at over 10%. As a result of the failure of Silicon Valley Bank (SVB) and Signature Bank, the governments of the United States and Switzerland rushed to shore up bank liquidity, which had a negative impact on the price of oil and other global assets.
SVB and Signature Bank’s unexpected collapse “forced a rethink about the health of the broader economy and spooked markets,” according to a note from JPMorgan analysts.
“Oil demand is being repriced, but we see little change in fundamentals and are inclined to ride out financial sector volatility,” analysts said, pointing to an upcoming OPEC+ summit and Washington’s expected move to begin refilling strategic stockpiles.
The OPEC+ advisory committee, which includes Russia, will meet on April 3.