Singapore — Oil prices fell more than $1 on Tuesday, extending the previous day’s slide, as the collapse of Silicon Valley Bank rattled equities markets and sparked fear about a fresh financial crisis.
The sudden shutdown of SVB triggered concerns about risks to other banks resulting from the US Federal Reserve’s sharp interest rate hikes over the last year. It also spurred speculation on whether the central bank might slow the pace of its monetary tightening. Beyond the SVB shock waves, oil prices were under pressure due to signs of a weaker-than-expected economic recovery in China, despite the lifting of its strict Covid-19 restrictions, CMC Markets analyst Leon Li said.
China’s statistics bureau released data last week showing consumer inflation in the world’s second largest economy slowed to the lowest rate in a year in February as shoppers remained cautious even after pandemic curbs were lifted in late 2022.