The price of oil declined significantly, offsetting Friday's rally. The reasons for this were the failure of Silicon Valley Bank and New York-based Signature Bank and concerns about possible contagion.
Against the background of the current situation, the US government is in a hurry to strengthen confidence in the banking system. The Treasury Department, the Fed and the FDIC said that all Silicon Valley Bank depositors will have access to their money from Monday.
The Fed also noted that it is creating a new program of urgent financing of banks aimed at protecting deposits. The program will offer loans for up to one year to banks, savings associations, credit unions and other institutions.
Meanwhile, the negative dynamics of the US currency provided only minor support for oil. The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.40% to 104.16.
However, many market observers are still optimistic about the long-term prospects of oil, given the expectations of consumption growth this year. According to forecasts by Saudi Aramco, the national oil company of Saudi Arabia, oil consumption is likely to reach a record 102 million barrels per day by the end of 2023.
The monthly reports of the Organization of Petroleum Exporting Countries and the International Energy Agency, expected this week, will give more information about the state of the market and the prospects for supply and demand.