UPDATE 6-Oil prices settle down, post big weekly losses on bank fears


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 (Changes headline, updates with settlement prices, adds
    By Laura Sanicola
       March 17 (Reuters) - Oil prices settled lower Friday,
reversing early gains of more than $1 a barrel as banking sector
fears caused both benchmarks to reach their biggest weekly
declines in months.
    Brent crude futures  LCOc1  settled down by $1.73, or 2.3%,
to $72.97 a barrel. U.S. West Texas Intermediate crude  CLc1 
fell $1.61, or 2.4%, at $66.74. 
    At their session low, both benchmarks were down more than
$3. Brent fell nearly by 12% in the week, its biggest weekly
fall since December. WTI futures fell 13% since Friday's close,
its biggest since last April. 
    "The underlying fundamentals aren't as terrible as what is
being priced in here, but there is concern the oil is not as
safe a place as cash or gold," said John Kilduff, Partner at
Again Capital LLC in New York.
        Oil prices tracked equity markets lower, dogged by the
banking sector crisis and worries about possible recession.
        All three indexes were sharply lower in afternoon
trading, with financial stocks  .SPNY  down the most among the
major sectors of the S&P 500 following the collapse of Silicon
Valley Bank (SVB) and Signature Bank and with trouble at Credit
Suisse and First Republic Bank.
    Prices had recovered some ground after support measures from
the European Central Bank and U.S. lenders, but dropped again
when SVB Financial Group  SIVB.O  said it had  filed for
    Pressure stemmed from "the continued fragile state of the
market", said Ole Hansen, head of commodity strategy at Saxo
    Analysts still expect constrained global supply to support
oil prices in the foreseeable future.
    OPEC+ members attributed this week's price weakness to
financial drivers rather than any supply and demand imbalance,
adding that they expected the market to stabilise.
    WTI's fall this week to less than $70 a barrel for the first
time since December 2021 could spur the U.S. government to start
refilling its Strategic Petroleum Reserve, boosting demand.
    And analysts expect China's demand recovery to add price
support, with U.S. crude exports to China in March heading
towards their highest in nearly two and a half years.
    Saudi Arabia and Russia in a meeting on Thursday affirmed
their commitment to OPEC+'s decision last October to cut
production targets by two million barrels per day until the end
of 2023.
    An OPEC+ monitoring panel is due to meet on Apr. 3.

 (Reporting by Laura Sanicola in Washington and Rowena Edwards
in London
Additional reporting by Florence Tan and Trixie Yapin Singapore
Editing by David Goodman and David Gregorio)

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