Crude oil WTI daily
The oil market didn’t spend much time below $70 in the post-pandemic period, but after five days of heavy selling, it’s now at $67.29, the lowest since June 2023.
Last year, we saw several dips to this range, all of them buys, including two intraday dips below $65. The lowest close last year was $66.74 on March 17, as the market grappled with the prospect of a regional banking crisis in the United States. It then quickly recovered to $83.44, in part due to OPEC’s pledges to cut production.
This time, OPEC+ may have played its cards right now, with widespread reports of a two-month delay in plans to bring oil back to the market. The problem is that the market is still in surplus in the first half of 2025, and that is certain to be exacerbated by slowing economies in the US, China and elsewhere.
There has not been a trade below $60 since April 2021 when Covid was still severely restricting demand.
The main risk now is that OPEC will collapse. So far there has been a lot of cohesion, but the UAE wants to increase oil production, and at some point we have to ask ourselves whether OPEC’s patience has reached its limit.