Oil Rises as Investors Cheer Broader Moves to Stabilize BankingMar 27, 2023 by Bloomberg
(Bloomberg) -- Oil’s late rally last week continued into Monday as the prospect of further US support for the banking sector emboldened investors.
With Silicon Valley Bank finding a buyer and US authorities considering expanding a lending facility, stocks bounced off of recent lows. While oil is expected to continue tracking broader markets in the short term, keeping volatility heightened, analysts see demand prospects increasing in the long-term.
“With sentiment slowly improving and yields inching cautiously higher, so too are oil prices,” said Craig Erlam, senior market analyst at Oanda. “It may take some time for the dust to settle and prices to fully reflect the new outlook after such a turbulent period, which should ensure volatility remains for now.”
Oil remains on track for its steepest first-quarter loss since 2020 as a potential US recession and resilient Russian output weigh on the outlook. In the days ahead, traders will look to Federal Reserve officials for clues on the path forward for monetary policy, and a key measure of US inflation is due.
In France, Exxon Mobil Corp. said it would begin shutting down its Gravenchon refinery — representing 20% of the country’s refinery capacity — on Saturday as protests disrupt crude supply. That’s hit producers such as Nigeria, with half of the nation’s April oil shipments still left unsold.
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