WTI crude fell as low as $90.66 but rebounded about $1.40 from the lows to finish at $92.07, down 3.5% on the day.
That's the first large daily loss for crude since November. It's been a one-way ride higher as the market reevaluated omicron and then began to price in the risk of a Russian invasion of Ukraine and/or sanctions.
There's no science for figuring out how much of a premium is priced into oil regarding Ukraine. The drop today of 3.5% on a day when only a portion of the risk around an invasion was removed may be telling. It suggests that Citi's estimate of $10 is a fair one.
In the event of a broader demobilization, that might set up a drop to the 38.2% retracement of the move since December, at $83.00. Near there is also some support from the late-January low. The 55-dma and 50% retracement then come in around $79.
With the tide seemingly turning towards peace, the near-time risks are certainly to the downside.
