Brent regains some losses but heads for a sharp weekly decline

Front-month ICE Brent has gained by $1.06/bbl on the day, to $75.35/bbl at 09.00 GMT. The futures contract is on track for a steep weekly loss of more than 9%.

PHOTO: Getty Images

Upward pressure:

Brent has breathed a sigh of relief as concerns over a banking crisis have subsided some.

Credit Suisse has secured a $54 billion emergency lifeline from Switzerland's central bank, and major US banks have agreed to bail out First Republic Bank. After Silicon Valley Bank's collapse, liquidity concerns have plagued First Republic Bank, another US private lender.

The International Energy Agency and OPEC have maintained their global oil demand growth forecasts this year. They both predict that China will lead oil demand growth this year.

The Chinese economy has been bolstered by figures showing modest growth in China's retail sales, industrial production and new home prices, CNBC reports. Some argue that the data has fallen short of market expectations, but the general trend indicates a gradual economic recovery for the world's biggest oil consumer.

Downward pressure:

Although fears of a major financial crisis in the world's largest economies have abated for now, recession fears have once again surfaced in the US and Europe.

The European Central Bank has raised its key interest rate by 50 basis points amid the turmoil in the financial sector. It has raised concerns that the US Federal Reserve will follow suit and raise its benchmark interest rate despite the banking crisis.

“Traders are clearly concerned about the economic outlook this year in light of recent bank failures and uncertainty at Credit Suisse. Authorities may have thrown their support behind the banking sector while managing the collapse of the mid-tier institutions in the US but traders are far from convinced that the worst is behind us,” says Craig Erlam, senior market analyst at OANDA.

By Konica Bhatt

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