Oil is facing its worst week this year due to global market turbulence caused by banking turmoil.
The losses have added up for both WTI and Brent after a three-day rout at the beginning of the week.
This has compounded what is now the worst week for oil in 2023.
Option selling by firms looking to cover losses or manage risk has exacerbated the selling.
The market is now wondering how OPEC+ will respond to this.
However, there has been a bit of a relief rally with Russia and Saudi Arabia’s top OPEC+ chiefs meeting in Riyadh.
They gave a signal to the market that they are discussing balance instability, which is a signal of confidence.
Ban Holdback has forecasted a surplus in the second quarter, which is not great news for prices going forward.
The market is coming off this rout, and going forward into the second quarter, it will probably be bumpy and choppy.
The near-term prices will likely climb from here, but it will probably have to wait for the second half of the year until those flows or high consumption from China starts to build into the market.
Some are saying we could be back at $100 by the end of the year.