The price of WTI crude oil has tumbled back to the downside, erasing the gains seen starting yesterday ahead of the invasion of Ukraine.
The last swing low nearly 24 hours ago bottomed at $91.27 before racing higher and peaking above $100 at $100.50. The price over the last 5 or so hours has seen a retracement all the way down to $91.43, just $0.16 from the low seen 1 day ago.
The price is back trading just above $93.00 which is just above the 100 and 200 hour MA at $92.94 and $92.74 respectively. After all the volatility, the price is back at the neutral MA levels. In a way, it is the markets way of saying, “Let’s restart and see what happens next?”
Helping to push the price back down was chatter of a US strategic petroleum reserve release of 60-70M barrels.
Recall in November, the US announced a 50M sale from the SPR. The price of oil did move down after that announcement over time from about $78.50 to $62.46 on December 2. From that low, however, the price marched higher culminating in the run to and through the $100 level today.
Other helpful fundamentals would be an agreement with Iran which would open up supply from them, along with the potential for more US production and supply. Of note is the Baker Hughes rig count increased by 19 rigs two weeks ago and 10 rigs last week. Is there something brewing in the US market?
If the the global economies slow because of higher inflation, lower stocks, tighter central bank policy, it can also be a headwind for the price as well.
Still… there are a lot of balls in the air and with it, uncertainty.