The oil market hasn't spent much time under $70 in the post-pandemic period but after five days of heavy selling, it's now at $67.29, which is the lowest since June of 2023.
Last year we saw several dips down into this range that were all bought, including two intraday falls below $65. The low close last year was $66.74 on March 17 as the market grappled with the potential for a US regional banking crisis. It then quickly recovered to $83.44 in part due to pledges from OPEC to curb production.
This time, OPEC+ may have already played its card with widespread reports about a two-month delay in plans to return oil to the market. The problem is, the market still sees a surplus in H1 2025 and that could certainly be worsened by sluggish economies in the US, China and elsewhere.
There hasn't been a trade below $60 since April 2021 when covid was still badly restraining demand.
The main risk now is that OPEC cracks. So far there has been great cohesion but the UAE would like bring on oil and at some point you have to wonder if there is a limit to OPEC's patience.
