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Crude oil prices remain exceptionally volatile on Tuesday, with WTI fluctuating between sub-$100 and nearly $104 per barrel after sinking from more than $110 on Monday as bearish and bullish factors push and pull crude benchmarks.
Monday saw crude oil prices drop sharply as China lockdowns and Saudi Arabia’s crude oil price cutting contributed to worries about a possible slump in crude oil demand in the world’s top crude importer.
But oil prices seesawed on Tuesday as the EU continued to try to reach a consensus on a Russian crude oil ban. While it seems that any EU-driven crude oil ban would need to be tempered to get all parties on board with the plan, France’s European Affairs Minister Clement Beaune has said that a deal could be reached within a matter of days. On the bearish side, a strong dollar has made crude more expensive for any buyer using anything other than dollars. Adding to this bearish sentiment on Tuesday was a sharp selloff for equities.
The general unease that exists in the market has brought about a new type of volatility—volatility that swings in terms of dollars whenever anything of note—or not—happens, including Tuesday’s comments by the UAE and Saudi Arabia that suggested the world was running out of oil production capacity.
At 12:50 p.m. ET, WTI crude prices were trading down $3.18 (-3.08%) at $99.89—after falling and rising several times earlier in the day. Brent crude was trading down $3.52 (-3.32%) at $102.67 per barrel after whipsawing in a similar pattern to WTI.
Oil prices are expected to remain volatile on Tuesday, with API’s inventory report set to be released at 4:30 p.m. ET.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.