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Oil price drops as US bank collapse rattles markets

14 March 2023 08:48 (UTC +04:00)

Oil fell as the collapse of Silicon Valley Bank — the second-largest bank failure in US history — rattled markets and unleashed recession fears, but prices stabilised as authorities intervened and the market mulled the prospect of US Federal Reserve rate pause, APA reports citing Financial Review.

Brent, the global benchmark, tumbled below $US80 per barrel of crude oil (bbl) on Monday (Tuesday AEDT), for the first time since early February.

But prices rebounded from a session low of $78.65/bbl on news that the US Treasury and the Federal Reserve had stepped in to head off a crisis of confidence, sending the price to $82.25/bbl.

The US authorities assured the market all depositors at the failed Silicon Valley Bank would be repaid their savings in full, and set up a new line of funding to stem fears of a broader run on America’s regional banks this week.