HomeIndustriesOil Extends Losses Amid Banking Sector Uncertainty

Oil Extends Losses Amid Banking Sector Uncertainty

Oil losses were sustained on Monday as investors continue to harbor concerns over the ongoing global banking crisis. This uncertainty has hampered investors’ willingness to take risks.

Crude prices, which have fallen since the failure of Silicon Valley Bank two Fridays ago, have continued to decline as the focus now shifts to the struggling Credit Suisse. UBS closed a state-supported takeover of the investment bank on Sunday evening following extensive talks.

Goldman Sachs Group Inc., which has long been viewed as the oil market’s biggest bull, expressed its own uncertainty with regard to the oil market in the current banking climate. According to the U.S.-headquartered investment banking company, oil is no longer likely to hit a price of $100 per barrel this year. The bank also reduced its Brent forecast for the 12 months ahead as investors continue to pull out with a near-term recession on the horizon.

“This has no longer anything to do with supply and demand,” Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S, said of the recent oil price declines. “It is purely driven by worries and short sellers can ride that wave until the general level of risk appetite shows signs of stabilizing.”

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