Oil prices climbed on Monday as concerns about the global banking system eased and geopolitical tensions flared up. Brent crude futures rose 77 cents, or 1.03%, to $75.76 a barrel at 0731 GMT, while US West Texas Intermediate crude increased by 74 cents, or 1.03%, to $70 a barrel. Brent rose 2.8% last week, while WTI rebounded 3.8% as jitters in the banking sector eased. Vandana Hari, founder of oil market analysis provider Vanda Insights, commented that crude markets were closely monitoring the sentiment in the financial market.
Meanwhile, Russian President Vladimir Putin’s announcement to station tactical nuclear weapons in Belarus heightened geopolitical tensions in Europe, which also supported oil prices. Putin’s move is one of Russia’s most pronounced nuclear signals yet and a warning to NATO over its military support for Ukraine. The situation has prompted Ukraine to call for a meeting of the UN Security Council in response, with NATO slamming Putin for his “dangerous and irresponsible” nuclear rhetoric.
Oil prices were also influenced by reports of the acquisition of the deposits and loans of failed Silicon Valley Bank by First Citizens BancShares Inc, which helped close one chapter in the crisis of confidence that has impacted financial markets. The banking sector is also hopeful of additional support for bank funding, with reports that US authorities were discussing expanding emergency lending facilities.
Investors are looking ahead to China’s manufacturing and services purchasing managers’ indexes, which are set to be released later this week for cues on demand from the world’s top crude oil importer. In the US, oil rigs rose for the first time in six weeks, with four new rigs added, while gas rigs held steady at 162, according to energy services firm Baker Hughes Co.
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