Oil Gains Some Ground as Investors Assess Banks, Russia

March 27, 2023Updated: March 27, 2023

LONDON—Oil prices rose on Monday as investors assessed efforts by authorities to rein in concerns over the global banking system while Russian President Vladimir Putin’s plans to place tactical nuclear weapons in Belarus ratcheted up tensions in Europe.

Brent crude futures were up 30 cents, or 0.4 percent, to $75.29 a barrel at 0900 GMT. West Texas Intermediate U.S. crude was up 28 cents, or 0.4 percent at $69.54 a barrel.

Brent rose 2.8 percent last week, while WTI rebounded 3.8 percent as jitters in the banking sector eased.

“Near-term oil prices are likely to remain volatile, influenced by the current financial market turmoil, but we retain a positive outlook,” said UBS analyst Giovanni Staunovo.

“We continue to expect rising Chinese crude imports and demand, plus lower Russian production, to tighten up the oil market and lift prices over the coming quarters.”

First Citizens BancShares Inc. said it will acquire the deposits and loans of failed Silicon Valley Bank, closing one chapter in the crisis of confidence that has ripped through financial markets.

Oil prices also drew support from Putin’s plans to station tactical nuclear weapons in Belarus.

The move is one of Russia’s most pronounced nuclear signals yet and a warning to NATO over its military support for Ukraine, which has called for a meeting of the U.N. Security Council in response. NATO slammed Putin for what it called his “dangerous and irresponsible” nuclear rhetoric.

Russia’s Deputy Prime Minister Alexander Novak has said that Moscow is close to achieving its target of cutting crude output by 500,000 barrels per day (bpd) to around 9.5 million bpd.

But Russia’s crude exports are expected to stay steady as it cuts refinery output in April, Reuters calculations showed on Friday.

Russia’s oil products exports have been hit harder than its crude exports by a recent European Union embargo, with tonnes of diesel stuck on ships awaiting buyers.