By Florence Tan
SINGAPORE, March 20 (Reuters) - Oil prices rose on
Monday after suffering their biggest weekly loss in months as
UBS struck a deal to buy Credit Suisse and some of the world's
largest central banks sought to reassure and stabilise global
financial markets.
Brent crude futures rose 35 cents, or 0.5%, to
$73.32 a barrel by 0007 GMT after a near 12% loss last week, its
biggest weekly fall since December.
U.S. West Texas Intermediate crude was at $67.11 a
barrel, up 37 cents, or 0.6%, after a 13% decline last week, its
biggest since last April.
Switzerland's largest bank, UBS, announced late on Sunday it
will buy the country's No. 2 lender Credit Suisse in a historic
deal. Following the announcement, the U.S. Federal Reserve,
European Central Bank and other major central banks pledged to
enhance market liquidity and support other banks.
The Swiss bank deal and central banks’ measures to inject
liquidity into the markets are restoring market confidence,
leading to a relief rally in risk assets, including the crude
markets, CMC Markets analyst Tina Teng said.
"The relief rally in broad markets may continue if the Fed
softens its tone on rate hikes," she added.
Investors are pricing a 60% probability that the Fed will
raise rates by 25 basis points on Wednesday, but some executives
are calling on the central bank to pause its monetary policy
tightening for now but be ready to resume raising rates later.
A slowdown in interest rate hikes could depress the
greenback, making dollar-denominated commodities more affordable
for holders of other currencies.
Separately, Goldman Sachs cut its forecasts for Brent crude
after prices plunged on banking and recession fears.
(Reporting by Florence Tan. Editing by Gerry Doyle)
florence.tan.thomsonreuters.com@reuters.net))
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