Crude oil prices continued their slide on Wednesday as yet another banking catastrophe unsteadied the market further.
WTI plunged 4.21% on Wednesday, falling below $70 for the first time since December 2021 to $68.33 per barrel at 10:10 a.m. ET. Brent Crude fell over 3.94% to $74.40, for a loss of $3.05 per barrel.
This is a sharp loss on the day, and just an extension of the previous losses seen earlier in the week, as Credit Suisse's largest backer-the Saudi National Bank-said it would not give the bank any more assistance due to regulatory constraints. On Tuesday, Credit Suisse noted "material weaknesses" in financial reporting controls and customer outflows in its annual report, Reuters said.
Saudi National Bank already has a 10% stake in Credit Suisse, which precludes them from taking on any more.
The news sent shares of Credit Suisse tumbling to a new record low as it lost 25% of its value in one fell swoop.
While just a single bank, the news comes on the heels of another banking catastrophe, Silicon Valley Bank (SVB), that sent oil prices lower earlier in the week.
SVB, the go-to lender for tech startups backed by venture capitalists, failed dramatically on Friday, with shares plunging 60% before the SEC halted trading. On Wednesday, the bank announced a massive capital raise, saying it would sell $2.25 billion in new shares to fix the balance sheet. That spooked investors, who feared the high share of uninsured deposits, creating a panic and a run on the bank. Shares tanked on Thursday, leading to an FDIC takeover on Friday.
The collapse of SVB and Signature Bank prompted fears that the contagion would spread to the broader financial markets.
WTI is now off 10.3% in a week, while Brent has shed 9.8% in the same time period.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More