Markets focused on the banking crisis and stronger demand in China, oil prices soften on Tuesday
Crude oil prices slumped on Tuesday after rebounding in the previous session as markets focused on developments in the banking crisis and indications of stronger demand in China.
Prices eased on Monday after their fastest rise in more than four months. Brent crude futures fell 30 cents to $77.82 a barrel at 0312 GMT. West Texas Intermediate crude (WTI) fell 4 cents, or 0.05%, to $72.77.
While risks remain in the banking system due to the latest events, bottom purchases in crude oil may dominate in the near term.
Prices rose in the previous session after Turkey stopped pumping crude from Kurdistan via a pipeline, following an arbitration decision confirming that Baghdad's approval is required to transport the oil.
Monday's announcement that First Citizens BancShares Inc will buy the deposits and loans of bankrupt Silicon Valley Bank provided optimism about the state of the banking industry, which has rattled financial markets.
Oil prices are likely to continue to be supported by indications of recovery in demand in China.
China's crude oil imports are expected to rise 6.2% to 540 million tons in 2023, according to an annual forecast by a research unit of China National Petroleum Corp on Monday.
China's manufacturing and services PMIs will be a major economic driver for oil prices, as positive data is expected to further improve the demand outlook.
A preliminary survey showed US crude inventories increased by nearly 200,000 barrels last week.
The American Petroleum Institute (API), an industry group, will release inventory data today, and the Energy Information Administration (EIA) official data on Wednesday.
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