Four things are happening here:
1) There is hope for a ceasefire
There's a 'peace trade' ongoing with all the fast money that piled into gold, bonds, oil and the yen reversing. Negotiations will continue tomorrow and you simply don't want to be long oil if/when a headline lands along the lines of "Russia and Ukraine agree to ceasefire".
2) Russian oil is getting to market
There's a growing confidence that even if the war continues, there's no appetite in Europe to stop the import of Russia crude. Moreover, India is working to make it easier to get Russian crude there and China isn't contemplating actions. So Russia's oil is going to get to market, war or not.
3) China lockdowns
Covid cases in China are at a two-year high and an entire province of 24 million people is locked down along with Shanghai and Shenzhen. That's a hit to demand and more could be coming.
4) Global worries
We've seen a global inflationary shock. So while the oil will still get to the market, that's not the case in every raw material. Lumber, steel, nickel and --- critically -- grains may be taken from the market. Prices of those goods have soared and that's going to flow through. It's also likely to push central bankers towards a tighter regime and economies into stagflation. That hit to economies will sap oil demand.
Add that up and there's a very good argument that oil should be right back to $95, if not lower as there was a premium building in crude well before shots were fired. I don't see a great argument to buy until $85.
