It's not entirely uncommon to see 4-5% swings in oil prices these days and today is no exception.
Oil is dragged lower to start the new week with concerns creeping in after Shanghai is sent into a nine-day lockdown. Growing concerns about the global economy is also adding to that but again, the volatility makes it hard to read into market know-how so to speak.
I've mentioned that I see the range for oil at the moment to be somewhere between $95 to $125 and that appears to be where we are at now. The wide range allows for added volatility swings like the one we are seeing today.
In the bigger picture, as long as geopolitics continue to be an issue, it is tough to argue against a profound drop in oil prices. The diversification away from Russian oil means many countries will have to look elsewhere for supply in an already tight market with extremely low global inventories.
Throw in the continued push towards the green transition in the bigger picture, that's a recipe to keep oil prices underpinned from a structural perspective.
