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Oil prices are recovering after recording the lowest level since 2021


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Oil prices recovered on Monday, rising more than 1 percent after hitting a 15-month low, amid concerns that turmoil in the global banking sector could lead to an economic recession that would dampen demand for fuel.

Amid volatile dealings, Brent crude futures for May delivery rose 82 cents, or 1.1 percent, to settle at $73.79 a barrel, while US West Texas Intermediate crude for April delivery rose 90 cents, or 1.4 percent, to $67.64 a barrel, before contracts expire on Tuesday.

The most heavily traded May futures contract rose 89 cents, or 1.3 percent, to $67.82 a barrel.

The recovery in oil prices came as Wall Street recorded gains.

Brent and West Texas Intermediate crude fell about $3 a barrel earlier and recorded their lowest levels since December 2021, with West Texas Intermediate crude falling below $65 a barrel during trading. Both benchmarks fell more than 10 percent last week as the banking crisis deepened.

The drop in oil prices came earlier despite reaching a historic deal under which Switzerland’s largest bank (UBS) will acquire Credit Suisse in an attempt to save the country’s second largest bank.

After the deal was announced, the US Federal Reserve, the European Central Bank and other major central banks pledged to boost market liquidity and support banks.

The S&P 500 and Dow Jones rose, helping oil prices recover from session lows on bets that the Federal Reserve is likely to pause interest rate hikes on Wednesday to ensure banking sector problems do not worsen. Dealers and economists remain divided on whether the Federal Reserve will raise the key interest rate.

And some executives are calling on the central bank to temporarily stop the monetary tightening policy, but with a willingness to resume raising interest rates later.

Meanwhile, two European Union officials and an official from one of the Group of Seven countries said today, Monday, that the group is unlikely to revise the Russian oil price ceiling of $ 60 a barrel this week.

The group had been due to review the price ceiling, set in December, in mid-March, but officials said the European Commission had told EU ambassadors there was no appetite among the G7 countries for an imminent review.

A ministerial committee of OPEC+, which includes the Organization of the Petroleum Exporting Countries and its producer allies including Russia, is scheduled to meet on April 3. The group agreed in October to cut oil production targets by two million barrels per day until the end of 2023.