On Friday, oil prices strengthened as a meeting between Saudi Arabia and Russia helped ease market concerns.
Support measures brought stability to a banking crisis that sent oil prices toward their most significant weekly drop since December.
Brent crude futures rose by $1.09, or 1.46%, reaching $75.79 a barrel at 1040 GMT, while U.S. West Texas Intermediate crude increased by $1.20, or 1.76%, to $69.55.
Both benchmarks reached over one-year lows this week and are heading for their largest weekly declines since December, at about 9%.
The collapse of Silicon Valley Bank (SVB) and Signature Bank (NASDAQ:SBNY), along with issues at Credit Suisse and First Republic Bank (NYSE:FRC), put pressure on oil and other global assets this week. However, prices regained ground on Friday, thanks to support measures from the European Central Bank and U.S. lenders.
Expectations of a less aggressive interest rate hike by the U.S. Federal Reserve next week keep the dollar under pressure. A weaker dollar typically supports oil prices, making oil more affordable for holders of other currencies.
Stephen Brennock of oil broker PVM said, “The conditions for volatile trading remain intact. The oil price roller-coaster is pausing for breath but is not over.”
Additional support came from OPEC+ members, who attributed this week’s price weakness to financial factors rather than supply-demand imbalances and anticipated market stabilization.
A Thursday meeting between oil producers Saudi Arabia and Russia also helped alleviate concerns.
This week, the dip in WTI’s price to below $70 a barrel for the first time since December 2021 may prompt the U.S. government to replenish its Strategic Petroleum Reserve, increasing demand.
Expectations of China’s demand recovery also bolstered the price rebound, with U.S. crude exports to China in March approaching their highest levels in nearly two and a half years.
Commerzbank (ETR:CBKG) stated on Friday, “This leaves sufficient (foreseeable) support for the oil price with OPEC+ having to convene an extraordinary meeting.”
An OPEC+ monitoring panel is scheduled to meet on April 3.
