Oil extends drop as inflation data awaited amid banking fallout

Oil extended losses ahead of key inflation data as the biggest U.S. bank collapse since 2008 continued to ripple through financial markets.

West Texas Intermediate traded near US$73 a barrel after closing 2.5 per cent lower on Monday following a volatile session. Investors are waiting the consumer price index read due later Tuesday for clues on the U.S. monetary path, though bets are increasing that the Federal Reserve won't raise interest rates next week due to the fallout from the demise of Silicon Valley Bank.

Brent's nearby put skew — a gauge of how much more traders are willing to pay for contracts that profit from a price decline rather than a rally — rose to the highest level since mid-August on Monday amid the market turmoil.