So, Brent crude fell below $100 a barrel on Tuesday , a week after reaching a 14-year high of $130, and WTI crude dropped to $96.4 a barrel, the lowest closing level since February 28.
The decline in oil prices was also supported by news that the US is considering the option of lifting sanctions on Venezuelan oil and by news on reaching an agreement on Iran’s nuclear program.
At the same time, the outbreak of coronavirus in China has resulted in a proliferating number of local lockdowns, threatening a slowdown in oil demand.
In addition, the discounts on Russian oil, which expanded to almost $30 a barrel, led to the entry of cheap oil into the market.
On Wednesday , the weekly statistical report from the EIA showed a significant increase in oil inventories by 4.3 million barrels.
The delegation of the White House intends to continue negotiations with the countries of the Middle East, but it will be challenging to get a result since relations are pretty spoiled.
The IEA report was more pessimistic and expected a decrease in demand by 1 mbpd due to the negative impact of high prices.
On Thursday , Brent crude jumped by 8 percent to $103.6 a barrel and WTI crude by 7 percent to $101.7 a barrel after the IEA warned on Wednesday that the market could lose 3 mbpd of Russian oil supply starting next month.
The mark of $108 a barrel of Brent has already been tested.
Considering the recent volatility in the market, then for the new reality, the change in oil prices by 7-8 percent per day is normal.
In the short term, the main topics that will continue to determine the big movements in the oil market will remain the war in Ukraine, the next meeting of OPEC+, and the outbreak of COVID in China.
The next OPEC+ meeting will be held on March 31, the results of which can present surprises.
But, if military operations become more active than the negotiation process, the situation in the oil market will again worsen.
For now, the technical picture on the oil market still favors continued growth in oil prices at least until the end of March.
He held senior analyst positions at OPEC, IEF in Riyadh, and OPEC FUND for International Development.