Oil prices have tumbled to their lowest levels since late 2021 amid worries about banks’ stability, Ben writes.
What they’re saying: “Broader market concerns related to the banking sector have weighed on risk assets, while oil is also seeing some soft fundamentals at the moment,” ING analysts wrote.
- OANDA analyst Edward Moya said several forces are pushing in the same direction.
- They include concerns about bank risks and uncertainty about Chinese demand growth.
The big picture: Via Axios‘ markets correspondent Matt Phillips, falling oil prices should lower inflation in the coming months, a factor that could help clear the way for the Fed to slow rate hikes.
What we’re watching: One question is whether further declines might prompt OPEC+ to consider new production cuts.
- Another question: how price declines might affect what’s already sluggish U.S. production growth.
- BloombergNEF has a helpful primer on why U.S. output is in the “slow lane with no exit in sight.”
- The culprits: “declining productivity of wells, the conservative investment strategy of producers amid a shift in focus to capital discipline, and the rising cost of oilfield services.”