Oil Logs Biggest Quarterly Drop in 6 Years as Supply Fears Cool
Crude prices posted their steepest quarterly fall since 2019 as Hormuz workarounds and weak Chinese demand eased supply fears.
Oil just had its worst quarter in six years — and if you're trading energy, you need to understand why the bottom fell out so fast. Prices cratered as the market realized the supply shock everyone feared simply didn't materialize the way the bulls had bet on.
The key story here is the Strait of Hormuz. Traders had priced in a worst-case disruption through one of the world's most critical oil chokepoints. But workarounds emerged, rerouting supplies and keeping crude flowing. When that existential fear got priced back out, sellers took control.
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China made the drop even worse. A pullback in crude imports from the world's biggest buyer added demand-side pressure on top of the supply relief. When supply fears ease AND your biggest customer is buying less, you've got a one-two punch that sends prices south fast.
For retail traders, this is a classic "buy the rumor, sell the news" unwind playing out across an entire quarter. The geopolitical premium that got baked in never got cashed. Now the market is repricing toward fundamentals — and those fundamentals don't look bullish with slowing Chinese demand in the picture.
Watch whether OPEC+ responds with production cuts to put a floor under prices, or whether this quarter's drop is just the start of a longer downtrend. The next move in crude could hinge entirely on what Beijing's economy does next. Continue reading at MarketWatch.com
