Oil Rises Again for Second Day as Banking Fears Ease for Now
Oil rises again on Tuesday, extending a recovery from a 15-month low hit the previous day, as the rescue of Credit Suisse eased worries about global banking sector risks that could hit economic growth and fuel demand.
After jitters initially, on Monday the mood across financial markets has lifted in the wake of UBS’ takeover of Credit Suisse and after major central banks said they would enhance market liquidity and support the banking system.
Brent crude was up 70 cents, or 0.95%, at $74.49 per barrel. U.S. West Texas Intermediate (WTI) also gained 81 cents, or 1.20%, trading at $68.45.
“Banking jitters may have taken a breather yesterday but remain in play,” said Stephen Brennock of oil broker PVM.
“Although an immediate crisis appears to have been averted there are still fears of another sell-off.”
The next focus for investors is the decision by the U.S. Federal Reserve on Wednesday on whether and by how much to raise interest rates when it concludes its two-day meeting.
Since the banking strife began this month, markets have revised expectations for the next Fed rate hike to 25 basis points from 50 bps.
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Source: Oil & Gas 360
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