Oil hovers near 15-month low after banking crisis roils market
BNN Bloomberg
Oil steadied near the lowest closing price in 15 months after a three-day rout started by the U.S. banking crisis and accelerated by options covering.
West Texas Intermediate futures hovered near US$67 a barrel after tumbling around 12% over the previous three sessions. The turmoil whipped up by the collapse of Silicon Valley Bank and fresh upheaval at Credit Suisse Group AG has reverberated across global assets, with selling in oil gathering pace as firms tried to limit their exposure in the options market.
“Prices are likely to remain volatile given the dimensions of uncertainties over Fed actions, U.S. banking turmoil, and China’s recovery,” Citigroup Inc. analysts Francesco Martoccia and Ed Morse said in a note.
OPEC’s top official earlier this month flagged concerns about slowing demand in Europe and the U.S., and investors will be watching to see if the rout draws a response from the group and its allies. However, traders are abandoning bets that the Federal Reserve will raise interest rates amid the banking turmoil.
