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Crude Oil Market Selloff Continues Despite Mounting Supply Issues, ANZ Bank Says

The wave of selling in the crude oil market continued as supply disruptions fade in the backdrop amid fears of an economic slowdown, Australia's ANZ Bank said in a Thursday note.

The selling saw Brent crude follow West Texas Intermediate below $100 per barrel, bringing the total loss to 20% after reaching $124/b in early June, the bank noted.

Despite the selloff, supply issues are showing no signs of easing, with Kazakhstan being the latest producer encountering issues. The Caspian Pipeline Consortium, which exports Kazakh crude from a Black Sea terminal, was ordered to stop loadings for 30 days due to a violation of a spill prevention plan, ANZ Bank said. However, Russian exports have held up better than expected as China and India continued snapping up Russia's oil supply.

Brent crude at $100/b would be indicative of only a mild recession and that support level could drop to $80/b in the unlikely event of a 5% decline in global demand, which has only occurred in the most severe of global recessions, according to ANZ Bank.