Oil prices fell more than $1 on Tuesday, extending the previous day’s slide, as the collapse of Silicon Valley Bank rattled equities markets and sparked fear about a fresh financial crisis.
Brent crude futures were down 82 cents, or 1%, at $79.95 a barrel, while U.S. West Texas Intermediate crude futures (WTI) dropped 82 cents, or 1.1%, to $73.98 a barrel.
On Monday, Brent fell to its lowest since early January, while WTI dropped to its lowest since December.
The sudden shutdown of SVB Financial (SIVB.O) triggered concerns about risks to other banks resulting from the U.S. Federal Reserve’s sharp interest rate hikes over the last year.
Traders now no longer expect a 50-basis points (bps) rate hike by the Federal Reserve next week, with a current projection of a 25 bps rise, even ahead of the release of U.S. consumer price data on Tuesday.
Economists surveyed by Reuters forecast consumer prices increased by 0.4% in February, which would lower the year-on-year increase in the CPI to 6.0% in February and mark the smallest year-on-year rise since September 2021.