Oil: “rough pumping”


An oil complex in Dhi Qar Governorate, Iraq, in August 2022.

tA slippery slope for oil. The sudden collapse of the Silicon Valley bank sent shock waves. Starting on the shores of Santa Monica, California, the feel of it was off the beaten path on the quiet shores of Lake Zurich. Attention, flooding wave for the Credit Suisse group! The Swiss banking institution’s course suddenly fell on the stock market, Wednesday, March 15, due to rumors of the risk of bankruptcy.

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Faced with the urgency of the situation, the Swiss National Bank has not played for some time to turn on the aid faucet. On the night of Wednesday to Thursday, March 16, I gave it a loan of 50 billion Swiss francs (50.7 billion euros), in order to enhance its liquidity. Hell savior.

What somewhat calms the wave of pessimism in the markets concerned about the risks of spreading, after the fall of the US Bank. This dark mood was not spared by the price of black gold. The most pessimistic expect a decline in demand. The price of a barrel of North Sea Brent crude for delivery in May fell on Wednesday to $71.67 (67.38 euros), its lowest level in fifteen months, compared to about $120 a year ago. Similarly, its US equivalent, a barrel of WTI, for April delivery, was trading at $65.65. Crude oil pumping stroke…

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Limited recovery in China

The Credit Suisse rescue raised the bar for oil. But without euphoria. On Friday, March 17, the price of a barrel of Brent rose again to $75. It also weakened the movement that was reinforced by the decision, on Thursday, of 11 major US banks to bail out the First Republic.

Philippe Chalmene, a professor at Paris Dauphine University and co-director of CyclOpe, a think tank specializing in raw materials, is pleased to see that his forecast for an oil price of nearly $70 a barrel at the end of the first semester is for a fairly credible moment. Beyond the banking suspense episode, this track justifies through “$25-$30 discount on Russian oil, which drives down prices”. He also believes that the recovery of Chinese imports, after the end of the zero Covid strategy, is still limited.

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Finally, he mentions the low price of gas. The European natural gas conversion facility traded at 44 euros per megawatt-hour on Friday in Amsterdam, compared to 130 euros recorded a year ago. The rising mercury with the advent of spring revives the energy market.

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