# Oil rises on demand hopes as banking crisis fears subside Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-03-17 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil Prices Firm After Saudi-Russia Meeting, Despite Banking Meta Description: Oil prices stabilise as Saudi Arabia and Russia reassure markets amidst strong China demand expectations, despite banking crisis impact on global oil and URL: https://financedigest.com/oil-rises-on-demand-hopes-as-banking-crisis-fears-subsidehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-03-17t015519z1lynxmpej2g01grtroptp4wintershall-dea-results-1736814302779-compressed.jpg) By Florence Tan and Trixie Sher Li Yap SINGAPORE (Reuters) – Oil prices firmed on Friday after a meeting between Saudi Arabia and Russia calmed markets amid strong China demand expectations, but were headed for their biggest weekly falls since December as a banking crisis rocked global financial and oil markets. Brent crude futures firmed by 30 cents to $75 a barrel by 0704 GMT, having snapped three days of losses to settle 1.4% higher on Thursday. U.S. West Texas Intermediate crude went up by 21 cents to $68.53 a barrel, after closing 1.1% higher in the previous session. Both contracts [hit their lowest in more than a year this week and are set](https://www.financedigest.com/uk-economy-set-for-smaller-hit-in-2023-than-previously-feared-imf.html "UK economy set for smaller hit in 2023 than previously feared – IMF") to post their biggest weekly falls since December at about 10%. Oil and other global assets were undercut this week by the collapse of Silicon Valley Bank (SVB) and Signature Bank and [trouble at Credit](https://www.financedigest.com/explainer-what-are-credit-default-swaps-and-why-are-they-causing-trouble-for-europes-banks.html "Explainer-What are credit default swaps and why are they causing trouble for Europe’s banks?") Suisse and First Republic Bank, which sent the U.S. and Swiss governments scrambling to [provide support](https://www.financedigest.com/keysource-to-provide-critical-facilitiesmanagement-support-for-leeds-city-council.html "KEYSOURCE TO PROVIDE CRITICAL FACILITIESMANAGEMENT SUPPORT FOR LEEDS CITY COUNCIL"). [“Oil demand](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") is being repriced, but we see little change in fundamentals and are inclined to ride out financial sector volatility, keeping our price forecasts unchanged for now as we await updates on potential policy actions in the coming weeks,” JPMorgan analysts said in a note, referring to an OPEC+ meeting and Washington most likely moving to start refilling strategic reserves. The advisory committee of the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, will meet on April 3. Further declines in prices may prompt OPEC+ to reduce supplies to prevent a forecast inventory build in the second quarter, analysts at [National Australia Bank](https://www.financedigest.com/swiss-national-bank-says-inflation-battle-not-yet-won.html "Swiss National Bank says inflation battle not yet won") said in a note. WTI fell under $70 a barrel for the first [time since](https://www.financedigest.com/soccer-arsenal-reach-womens-champions-league-semis-for-first-time-since-2013.html "Soccer-Arsenal reach Women’s Champions League semis for first time since 2013") December 2021, which could spur the U.S. government to start refilling its Strategic Petroleum Reserve, which is sitting at record low levels, and [boost demand](https://www.financedigest.com/unabated-rise-in-internal-complexities-to-boost-the-demand-for-medical-devices.html "Unabated rise in Internal Complexities to Boost the Demand for Medical Devices"). Analysts’ expectations on [China’s demand recovery supported the end-week price rebound](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook"), with U.S. crude exports to China in March headed for their highest in [nearly two and a half](https://www.financedigest.com/nearly-half-of-parents-still-give-pocket-money-to-their-adult-children.html "Nearly half of parents still give pocket money to their adult children") years. China’s demand rebound will be positive for [oil prices if upcoming data](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") shows a good recovery of the country’s economy, said analyst Tina Teng of CMC Markets. Road traffic and air travel in China are [growing strongly while signs](https://www.financedigest.com/discount-dining-clubs-tastecard-and-gourmet-society-grow-their-offering-as-chimichanga-and-spaghetti-house-both-sign-up.html "Discount dining clubs tastecard and Gourmet Society grow their offering as Chimichanga and Spaghetti House both sign up") of improvement have emerged in developed economies,” ANZ analysts said in a client note. However, contagion risks among banks are still keeping investors on edge, curbing their appetite for assets such as commodities, as they fear a further rout could trigger a [global recession and cut oil demand](https://www.financedigest.com/artificial-intelligence-goes-global-demand-for-ai-reaches-four-continents-in-three-months-new-figures-from-synechron-show.html "Artificial Intelligence goes global: demand for AI reaches four continents in three months, new figures from Synechron show"). The recent [banking turmoil](https://www.financedigest.com/banking-turmoil-means-recession-fears-are-creeping-back.html "Banking turmoil means recession fears are creeping back") may continue to weigh on the demand outlook. These issues regarding inflation, the central [bank’s rate hikes](https://www.financedigest.com/big-ecb-hike-adds-fuel-to-the-banking-sector-fire.html "Big ECB hike adds fuel to the banking sector fire"), and confidence in financial systems cannot be settled quickly,” Teng said. (Reporting by Florence Tan and Trixie Yap; Editing by Tom Hogue, Gerry Doyle and Sonali Paul) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---