Oil prices climbed on Thursday after Credit Suisse received a financial lifeline from Swiss regulators.
Brent crude oil, the international benchmark for Nigerian oil, rose 0.7% to $74.23 a barrel, while West Texas Intermediate crude oil increased by 0.6% to $68.04 a barrel.
The recovery came after three days of decline, with US crude falling below $70 a barrel for the first time since December 2021. However, market sentiment remained fragile with fears growing over the stress on banks globally.
Earlier today, Credit Suisse announced it has reached an agreement with the Swiss national bank to borrow $56bn to augment its liquidity. The announcement helped calm the market but fear of a possible financial crisis persists.
The rebound in oil prices was partly aided by the fall in US fuel stocks last week when Energy Information Administration data showed that crude inventories rose by 1.6 million barrels, gasoline and distillates stocks fell by a combined 4.6 million barrels.
According to Lim Tai An, an analyst at Phillip Nova, OPEC’s revised crude oil outlook for China demand in 2023 also help oil prices.
The oil producer group raised its 2023 China demand forecast this week and a monthly report from the International Energy Agency (IEA) on Wednesday flagged an expected boost to oil demand from resumed air travel and China’s economic reopening after abandoning its zero-COVID policy.
But oversupply concerns remain.
The IEA report said that commercial oil stocks in developed OECD countries have hit an 18-month high while Russian oil output in February stayed near levels registered before the war in Ukraine despite sanctions on its seaborne exports.
