Brent sharpens decline to 15-month lows, almost giving up $70

International Benchmark Brent declined for the second straight session, hitting 15-month lows and almost giving up $70 amid uncertainty in the banking sector and its impact on fuel demand. 

Prices were also pressured by commitment of Saudi Arabia and Russia to cutting global output by 2 million bpd until the end of the year.

Brent Today

Brent fell 3.8% to $70.17 a barrel, the lowest since December 2021, with a session-high at $73.69.

Brent lost 2.8% on Friday, the fourth loss in five days following the collapse of the Silicon Valley Bank in the US and the troubles with the Swiss Credit Suisse Bank.

Brent lost 12.25% last week, the largest weekly loss since March 2022 on concerns of another global financial crisis.

Global Banking Crisis

As several US local banks undergo bankruptcy while Credit Suisse in Europe undergoes a bailout, investors are concerns about a repeat of the 2007-2008 crisis.

A major cause behind the current crisis are the high interest rates imposed by central banks to combat inflation.

Some analysts believe oil prices could reach $60 a barrel under the current situation.

 OPEC+

Saudi Arabia welcomes Russian energy minister Alexander Novak  last week, with both sides asserting their commitment to the OPEC+ policy of cutting production by 2 million bpd until the end of the year.

The oil organization is likely waiting for calm to return to the markets before taking any more steps to support weak prices.

Brent Forecasts

Goldman Sachs analysts cut their estimates for oil prices this week to $94 a barrel in the next 12 months, and $97 in the second half of 2024, as inventories increase worldwide and supplies increase as well outside OPEC.