Oil held losses as mounting concerns over a global banking crisis hampered market liquidity and dampened investors’ appetite for risk.
(Bloomberg) — Oil held losses as mounting concerns over a global banking crisis hampered market liquidity and dampened investors’ appetite for risk.
Crude’s recent plunge in the past two weeks has investors focusing on survival versus weighing the commodity’s fundamentals as troubles at Credit Suisse Group AG and SVB triggered turmoil across financial markets.
Even the oil market’s most ardent bull, Goldman Sachs Group Inc., no longer sees oil reaching $100 a barrel this year. The bank lowered its Brent forecast for the 12 months ahead as rising near-term recession concerns, and an exodus of investor flows sharply lowered crude prices.
READ: Goldman Sachs No Longer Sees Oil Reaching $100 This Year
After trading in a tight range at the start of the year, crude has broken lower amid the banking turmoil, global recession fears and resilience in Russian crude flows. The price slump has raised the prospect of intervention from OPEC+, though there’s speculation the group will stay on the sidelines for now.
“This has no longer anything to do with supply and demand,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S. “It is purely driven by worries and short sellers can ride that wave until the general level of risk appetite shows signs of stabilizing.”
Energy Daily, Bloomberg’s daily energy and commodities newsletter, is now available. Sign up here.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.