Oil Drops Below $70 A Barrel, Falls To Lowest Level Since 2021

Failing banks and volatility in equity markets have pushed oil prices to their lowest level since December 2021.

The price of West Texas Intermediate (WTI) crude oil, the U.S. standard, has fallen below $70 U.S. a barrel and is now trading at $68.35 U.S.

Brent crude oil, the international benchmark, has dropped below $75 U.S. per barrel to trade at $74.54 U.S.

WTI crude oil’s price has declined 11% since March 10, while Brent crude oil’s price has decreased 10% in the same period.

Both prices have fallen for three consecutive days as turmoil in the global banking sector and the failure of several U.S. regional banks roils global markets.

Despite the current drop in prices, there is some news that could help to lift oil prices.

A new report from the International Energy Agency (IEA) forecasts a boost to oil demand from China, a day after OPEC increased its Chinese demand forecast for the year.

The latest data out of China showed that its industrial output rose more than 2% in January and February of this year following the end of strict COVID-19 containment measures.

Later today (March 16), the European Central Bank is expected to raise interest rates by 50-basis points (half a percent) as the continent’s economy gains strength and inflation is expected to remain elevated for an extended period.

Higher interest rates could push oil prices even lower as economic growth slows. Concerns of a worsening financial crisis in the banking sector could also drag oil demand lower.