Oil rose from the lowest close in 15 months after a three-day rout started by the US banking crisis and accelerated by options covering.

West Texas Intermediate futures traded near USD 68 a barrel after tumbling around 12 percent over the previous three sessions. The turmoil whipped up by the collapse of Silicon Valley Bank and fresh upheaval at Credit Suisse Group AG has reverberated across global assets, with selling in oil gathering pace as firms tried to limit their exposure in the options market.

“Prices are likely to remain volatile given the dimensions of uncertainties over Fed actions, US banking turmoil, and China’s recovery,” Citigroup Inc. analysts Francesco Martoccia and Ed Morse said in a note.

OPEC’s top official earlier this month flagged concerns about slowing demand in Europe and the US, and investors will be watching to see if the rout draws a response from the group and its allies. However, traders are abandoning bets that the Federal Reserve will raise interest rates amid the banking turmoil.

Further oil price gains may be limited in the near term, with OPEC this week forecasting a modest surplus in the second quarter, a typical period of soft demand before the summer. The International Energy Agency on Wednesday said that the market was already in surplus on Russian output.

A long-term timespread for global benchmark Brent has weakened during the recent selloff, narrowing to USD 2.94 a barrel in backwardation on Wednesday. That compares with USD 5.26 at the end of last week.

US crude inventories expanded by 1.55 million barrels last week, according to data from the Energy Information Administration on Wednesday. Net total oil exports, including crude and refined products, jumped to 3.5 million barrels a day. That figure has been surpassed only once since 1990.

“We seem to be walking on thin ice right now, with the fragile risk environment still trying to stabilize from the SVB fallout,” said Yeap Jun Rong, a market strategist for IG Asia Pte in Singapore.