Brent crude oil fell to $79 per barrel

Oil prices continue to decline, following the trend of yesterday. The main pressure on the Brent exchange rate is exerted by the massive withdrawal of investors from risk due to the rapid collapse of one of the largest banks in the United States – Silicon Valley Bank.

Yesterday, the price of Brent oil fell to the level of $78.90 per barrel, having managed to recover during the day to the area of $82.20. However, today the quotes fell again to the level of $78.78 per barrel. North American WTI oil is trading near the $72.67 mark on Tuesday.

Oil prices began their decline on Monday, March 13, after it became known about the collapse of the American Silicon Valley Bank, which last Friday came under the control of the Federal Deposit Insurance Corporation. In connection with these events, the US Federal Reserve announced a new mechanism for providing funds to financial institutions totaling $25 billion.

Analysts note that a wave of investors leaving risky assets swept through the country amid fears of a large-scale financial crisis. However, most economists view the current situation more as a temporary shock, which is unlikely to have a significant impact on most commodity markets in the medium and long term.

Another reason for the current decline in oil prices was deflation in China on signs of a weaker-than-expected economic recovery, despite the lifting of strict coronavirus restrictions. The inflation rate in China in February was only 1% year-on-year, which reflected the current deflationary state of the Chinese economy and weak demand.