Oil rises as banking fears ease for now


After jitters initially on Monday the mood across financial markets has lifted in the wake of UBS’ takeover of Credit Suisse and after major central banks said they would enhance market liquidity and support the banking system.

Brent crude was up 52 cents, at $74.31 per barrel while U.S. West Texas Intermediate (WTI) also gained 52 cents, or 0.8%, trading at $68.16.

The next focus for investors is the decision by the U.S. Federal Reserve on Wednesday on whether and by how much to raise interest rates when it concludes its two-day meeting.

Since the banking strife began this month, markets have revised down expectations for the next Fed rate hike to 25 basis points from 50 bps.

The dollar index, rose on Tuesday after hitting a five-week low the previous session. A stronger dollar makes oil more expensive for holders of other currencies and so can temper demand.

A meeting of key ministers from OPEC+, which includes OPEC members plus Russia and other allies, is scheduled for April 3. OPEC+ sources told Reuters the drop in prices reflects banking fears, rather than a worsening supply and demand balance.

Also coming into view is the latest U.S. oil inventory reports, which a Reuters survey expects to show lower crude and product inventories. The first report, from the American Petroleum Institute, is due out at 2030 GMT on Tuesday.

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