Oil Prices Continue To Drop As Banking Concerns Spread
It’s been a downward week for oil prices, with prices dropping roughly $10 per barrel in the past seven days. West Texas Crude was trading in the mid-$60 range in Monday’s action. Patrick DeHaan with GasBuddy said last week, oil investors were concerned about the health of the U.S. economy. He noted that concern has spread international.
“There are fears that, with rising interest rates around the world, that this could certainly engulf more banks globally. Certainly, we've already seen some significant banks names involved with UBS taking over Credit Suisse over the weekend, so a lot of anxiety that this may not be the end of it and what the implications could be on the economy could be significant.”
DeHaan added with all eyes on the banking situation, issues that have driven the headlines for the past year or so, such as Russia’s invasion of Ukraine, or COVID-19 have moved to the back burner. What does DeHaan expect for oil prices in the coming weeks?
“Once the banking situation is done, I would expect a quick turn to an increase in consumption out of China. And I think that's probably why OPEC is not stepping in yet because there certainly could be a big jump in consumption once the banking and the crisis is resolved.”
DeHaan added the transition to summer blends in the U.S. will impact what consumers pay at the pump as well.
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