The close down of Silicon Valley Bank has raised fears of new financial crises as oil prices fell on Monday along with equities.
Reuters reported that Brent crude fell by 1.7 percent to $81.34 per barrel by 10.01am GMT. West Texas Intermediate crude dropped by 1.8 per cent, to $75.28 a barrel.
The fear of the impact of the failure of Silicon Valley Bank led to a sell-off in US assets at the end of last week.
Also, it was reported on Sunday that state regulators closed New York-based Signature Bank on Sunday.
Bloomberg said the failure of the tech-lender, Silicon Valley Bank has exacerbated further crisis in energy markets.
The Stoxx bank index for Europe fell 5.7% after falling 3.8% on Friday. On Sunday, US authorities enacted emergency measures to support public trust in the banking sector.
Analysts from ANZ Bank said in a note on Monday morning, “Market sentiment was already fragile as worries about further monetary tightening by the Fed have been worsened by high crude oil inventories in the US.”
Speaking about the competing sentiment drivers in the crude market, managing partner of SPI Asset Management said, “It’s like the battle of surging activity data in the East meets macro malaise in the West.”
For the first time since July 2020, US energy companies this week reduced the number of oil and natural gas rigs operating for a fourth week in a row, according to energy services company Baker Hughes.