RIYADH: Oil prices fell almost $4 on Monday along with equities as the collapse of Silicon Valley Bank raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support.
Brent crude futures were down $3.66, or 4.42 percent, to $79.12 per barrel by 04.30 p.m. Saudi time, while West Texas Intermediate US crude futures fell by $3.56, or 4.64 percent, to $73.12 a barrel.
Brent hit its lowest levels since early January while WTI touched prices not seen since early December.
Fears of contagion from the failure of Silicon Valley Bank led to a selloff in US assets at the end of last week, while state regulators closed New York-based Signature Bank on Sunday.
Biden plans limits on oil drilling in Alaska, Arctic Circle
US President Joe Biden will prevent or limit oil drilling in 13 million acres of Alaska and the Arctic Ocean, the Associated Press reported on Sunday, citing an administration official.
The reported move comes as Biden’s administration earlier this week said that it has not yet made a final decision on whether to approve ConocoPhillips’ massive Willow oil project in northwest Alaska.
According to AP, the plan has two parts. To start with, Biden will bar drilling in nearly 3 million acres of the Arctic Ocean, closing off the rest of its federal waters from oil exploration.
Citing the administration official, the report added that the administration will then develop new rules for more than 13 million acres in the National Petroleum Reserve — Alaska. The area includes the Teshekpuk Lake, Utukok Uplands, Colville River, Kasegaluk Lagoon and Peard Bay Special Areas.
ConocoPhillips’ Willow project has support from the oil and gas industry and state officials eager for jobs, but it is opposed by environmental groups who want to move rapidly away from fossil fuels to combat climate change.
Argentina’s YPF plans to double oil production in five years
Argentina’s state oil company YPF will double oil output and pump up natural gas by 30 percent in the next five years, the company’s chief financial officer said.
This year, YPF sees its oil production growing by 8 percent while natural gas output is expected to grow 3 percent, said CFO Alejandro Lew during an event in New York to celebrate the company’s 30th anniversary of trading on the New York Stock Exchange.
“We still feel very conformable with our achievement,” said Lew, adding that YPF is “in a good position to continue the acceleration of the monetization of Vaca Muerta resources.”
Vaca Muerta is Argentina’s massive shale formation, responsible for much of the expected uptick in oil and gas output.
YPF also wants to explore partnerships to exploit reserves in the southern Palermo Aike formation, according to company chairman Pablo Gonzalez.
The state-run company estimates that the formation holds 6.6 million barrels.
(With input from Reuters)