Oil futures fell Monday as investors attempted to get a grip on the fallout from the collapse of Silicon Valley Bank.
Federal regulators moved Sunday to make depositors in the bank whole, while New York closed Signature Bank, leaving worries about a potential financial crisis to hang over markets as the trading week began.
- West Texas Intermediate crude for April delivery CL.1,
-5.10%CL00, -5.11%CLJ23, -5.09%fell $1.03, or 1.3%, to $75.65 a barrel on the New York Mercantile Exchange.
- May Brent crude BRN00,
-4.80%BRNK23, -4.76%, the global benchmark, was off $1.05, or 1.3%, at $81.73 a barrel on ICE Futures Europe.
- Back on Nymex, April gasoline RBJ23,
-4.21%fell 1.1% to $2.617 a gallon, while April heating oil HOJ23, -3.80%lost 0.8% to $2.75 a gallon.
- April natural gas NGJ23,
-1.15%jumped 1.6% to $2.597 per million British thermal units.
Regulators late Sunday guaranteed all deposits at SVB and Signature Bank, while the Federal Reserve announced a new facility aimed at ensuring customers at all banks would have access to their deposits as they attempted to stave off a series of bank runs.
SVB was closed by California regulators on Friday, marking the second largest bank collapse in U.S. history.
Read: SVB collapse means look out for more stock-market volatility, say analysts.
But jitters remained. While U.S. stock-index futures were steady, albeit in choppy trade, investors continued to pile into safe-haven assets like U.S. Treasurys and gold, while shunning other commodities.
Need to Know: SVB’s rescue means the Fed won’t hike rates in March, says Goldman Sachs
Downside, however, may be limited by reports of strong buying from China, said analysts at ING, in a note, a move that ties in with a narrowing of the price spread between Brent and Dubai crude.
“This makes sense given the demand recovery that is expected not only from China but broader Asia following a relaxation in China’s [zero-COVID] policy late last year,” they wrote.