OPEC+ Isn’t Panicking About Oil’s Sudden Drop — Yet
Crude’s decline is being blamed on speculative money exiting the derivatives market, rather than economic fundamentals.
Haitham al-Ghais, secretary-general of the Organization of Petroleum Exporting Countries.
Photographer: Aaron M. Sprecher/BloombergOil has been perhaps the biggest collateral victim as the banking drama spread from California to Switzerland in recent days. In little more than a week, Brent crude has fallen by $10 a barrel, or about 15%. The speed and magnitude of the selloff has some investors asking: Where’s OPEC+? The oil cartel is, for now at least, in wait-and-see mode, and unlikely to act until the Federal Reserve concludes its next monetary policy meeting on March 22.
In the last few hours, the message I have heard from oil capitals is “no panic.” Perhaps the group is simply putting on a brave face, buying time before it needs to act. Perhaps. While Brent and West Texas Intermediate prices have fallen abruptly, OPEC+ delegates are still encouraged by what they describe as robust Asian demand. China is on the mend, and India is buying a lot.