The banking crisis that started with Silicon Valley Bank has extended beyond USA as expected.
California-based Silicon Valley Bank (SVB) and New York’s Signature Bank, collapsed under the weight of heavy losses on their bond portfolios and a massive run on deposits.
While geopolitical concerns in Europe increased as a result of remarks made by Russian President Vladimir Putin over the weekend, oil prices stabilized in Asian trade on as investors looked for guidance from broader financial markets.
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Alexander Novak, the deputy prime minister of Russia, claimed that the country was near to accomplishing its goal of reducing crude production by 500,000 barrels per day (bpd) to about 9.5 million bpd.
But as it reduces refinery output in April, Russia’s crude exports are anticipated to remain stable.
A higher dollar increases the cost of dollar-denominated goods for owners of other currencies and tends to reduce the demand for oil.
This reaction is reasonable, especially in the Asia-Pacific, a big, diverse, and dynamic region. The three greatest economies in the world—the United States, China, and Japan—are located in the Asia-Pacific region in regard to purchasing power parity.
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West Texas Intermediate (WTI), Brent Blend, and Dubai Crude are the three main benchmarks. Other well-known blends include those used by OPEC, such as the OPEC Reference Basket, Tapis Crude, which is traded in Singapore, Bonny Light, which is used in Nigeria, Urals oil, which is used in Russia, and Isthmus of Mexico.
President Vladimir Putin’s assertions that he would install tactical nuclear weapons in Belarus, raising geopolitical tensions in Europe over Ukraine, helped sustain prices to some extent.
According to Reuters.com, Oil markets are closely watching the sentiment in financial market, while oil fundamentals remain sidelined, said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“Expect most price action in Brent and WTI futures to occur during the Europe and U.S. trading hours, marked by plenty of intraday volatility,” Hari said.