Oil fell on concerns of the banking sector

Oil extended its losses on Wednesday, with Brent crude hitting a three-month low as concerns about Credit Suisse raised concerns in global markets, limiting the positive impact of expectations of a recovery in Chinese oil demand.

Indications of a return to calm and stability faded after the National Bank of Saudi Arabia, the largest investor in Credit Suisse, said that it could not provide more liquidity to the Swiss bank, which led to a decline in its share and the broader European stocks.

Crude futures fell $1.21, or 1.6%, to $76.24 a barrel by 1135 GMT. West Texas Intermediate crude futures also fell $1.20, or 1.7 percent, at $70.13 a barrel.

Oil prices rose earlier thanks to figures showing a recovery in Chinese economic activity in the first two months of 2023 after the end of strict restrictions to contain Covid-19.

Both benchmarks lost more than 4 percent on Tuesday, hitting their lowest levels in three months, under pressure from fears that the collapse of Silicon Valley and another US bank would lead to a financial crisis that would affect fuel demand.

The International Energy Agency’s monthly report on Wednesday was supported by the expectation of an increase in Chinese demand for oil, a day after OPEC raised its forecast for Chinese demand growth for 2023.

Investors are now awaiting official US oil inventories data, which will be released later on Wednesday.