A weaker dollar makes oil cheaper for holders of other currencies and generally supports oil prices.
Oil prices fell on Tuesday, extending the previous day’s slide, as the collapse of a Silicon Valley bank jolted equity markets and fueled fears of a new financial crisis.
Brent oil futures fell by 9 cents to $80.68 per barrel. US West Texas Intermediate (WTI) crude futures were down 16 cents at $74.64 a barrel. On Monday, Brent fell to its lowest level since early January, while WTI fell to its lowest level since December.
The sudden closure of SVB Financial raised concerns about risks to other banks stemming from the US Federal Reserve’s sharp interest rate hikes last year. It also fueled speculation that the central bank might slow the pace of monetary tightening.
US authorities launched emergency measures on Sunday to shore up confidence in the banking system after fears of contagion from a Silicon Valley bank failure led to a sell-off in US assets late last week and state regulators shut down the signature in New York. Bank on Sunday.
The dollar index, which measures the currency against six peers, rose on Tuesday after falling for three days in a row – it hit a near-month low on Monday. A weaker dollar makes oil cheaper for holders of other currencies and generally supports oil prices.
In US supply news, the American Petroleum Institute is expected to release industry data on US oil inventories on Tuesday.
Six analysts polled by Reuters estimated on average that crude oil inventories rose by about 600,000 barrels in the week to March 10.
(Except for the headline, this story was not edited by NDTV staff and was published on a syndicated channel.)
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