Oil prices dropped to their lowest levels in 15 months on Monday on concerns that risks in the global banking sector and a potential increase in US interest rates could spark a recession that would sap fuel demand.

In volatile trading, Brent crude futures for May was down 83 cents, or 1.1 per cent, to $72.14 a barrel by 1425 GMT. The US West Texas Intermediate crude contract for April was down 91 cents, or 1.4 per cent, at $65.83 before its expiry on Tuesday.

The more actively traded May futures were down 1.3 per cent at $66.05 a barrel. Brent and WTI earlier fell by about $3, hitting lows last registered in December 2021, with WTI sinking below $65 a barrel before moving briefly back into positive territory. Both benchmarks shed more than 10 per cent of their value last week as the banking crisis deepened.

The slide in oil occurred despite a historic deal in which UBS, Switzerland’s largest bank, agreed to buy Credit Suisse in an attempt to rescue the country’s second-biggest bank. However, banking stocks and bonds continued to plunge on Monday in a sign that investor confidence remains fragile.