Oil retreated by $4, along with stocks, as the collapse of Silicon Valley Bank increased fears of a new financial crisis.
Brent crude futures fell $3.97, or 4.9%, to settle below $78.83 a barrel. West Texas Intermediate U.S. crude oil futures fell $3.87, or 5%, to settle at $72.83 a barrel.
Brent hit its lowest level since early January, while WTI touched prices.
Fears of contagion from the Silicon Valley bank’s disappointment led to a selloff of much of its U.S. assets late last week, and state regulators shut down New York-based Signature Bank on Sunday.
Europe’s STOXX bank index fell 5.6% and was 3.8% lower on Friday.
U.S. authorities on Sunday began taking emergency steps to restore confidence in the banking system. A weak dollar in recent days, which makes oil cheaper, has provided some support to prices.
Oil fell following a positive performance on Friday when U.S. employment data surprised. The February data beat expectations, with nonfarm payrolls rising 311,000 compared to a 205,000 job addition.
Natural Gas Projects
The World Bank may be willing to finance gas projects in Mozambique to ensure regional energy access if costs are the lowest among energy sources.
In 2017, the World Bank Group announced it would no longer finance oil and gas after 2019. Access to energy for people in difficult economic conditions and the project fit within the countries’ obligations under the Paris Agreement.
According to World Bank data, in low-income Mozambique, 30.8% of the population had access to electricity in 2020.
The World Bank could support the development of Mozambique’s gas if it is the lowest-cost resource so that more people can access electricity and reduce more polluting energy sources, such as coal.
Completing the first shipment of LNG from the Coral South project in Mozambique marks a milestone in Eni’s strategy to use natural gas as a major asset in enhancing Europe’s energy security.
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