Here’s What Happened To Crude Oil Prices Today (Commodity:CL1:COM)

Here’s What Happened To Crude Oil Prices Today (Commodity:CL1:COM)

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Since Russia’s invasion of Ukraine occurred, oil futures have been a hot commodity. The price of oil future contracts for April (/MCLJ2) and (/CLJ2) launched as high as roughly $130 per barrel. However, the morning of March 9th, 2022, was not a good one for those long on oil futures. Prices tumbled from roughly $126 per barrel to $110 at the time of writing. So, why did oil futures empty the tank today?

Zelenskyy just wants peace in Ukraine:

With the Russian invasion of Ukraine, we saw crude oil prices rocket as supply chains were disrupted and sanctions were placed. However, Volodymyr Zelenskyy has been consistent in his desire to end the war in Ukraine and has reiterated his desire to reach a compromise with Russia. Should a compromise be met, supply chains will likely stabilize, especially if global sanctions on Russia are lifted. The end of the Ukrainian-Russian conflict is the outcome the world wants, but it’s not so good for those long on crude oil futures.

The United Arab Emirates is looking to ramp up oil production:

The United Arab Emirates wants OPEC+ to ramp up oil output. This is the primary catalyst for the stark drop in crude oil prices today. If OPEC+ members choose to further increase oil output from the current increased production rate of 400,000 bpd, crude oil prices will likely continue to fall. On another note, the Iraqi Oil Minister has claimed that he hasn’t seen excess demand from consumers and worries hikes in oil production could harm the market further.

As of now, it’s a waiting game to see what OPEC+ inevitably decides to do. It’s also worth noting that large oil producers are making a killing off the $100+ barrels of crude. While consumers at the pump have broken hearts, oil producers don’t and aren’t upset with elevated crude oil prices. Either way, just the talks of potential crude oil production increases caused prices to drop significantly.

If U.S. imports from Russia are low, why did prices skyrocket in the first place?

While the U.S. gets most of its oil from Canada (51%), Mexico (8.5%), and Saudi Arabia (5%), oil pricing works on a global level. The U.S. imported roughly 200,000 bpd of crude oil from Russia in FY21, which comes to 3% of the nation’s crude oil imports. However, oil pricing works on a global level, and any disruptions in the supply chain will inevitably cause prices to rise. It doesn’t matter how much oil a company produces, imports, or exports. The prices of oil are directly tied to supply, and where there are any supply disruptions oil prices with rise across the globe. I know this may not be an in-depth answer that some are looking for, but it’s that simple.


In conclusion, crude oil dropped due to the hopes that Ukraine and Russia can achieve some sort of resolution along with the possibility that OPEC+ could ramp up oil production. With the war in Ukraine coming to an end, supply disruptions would mitigate. Should OPEC+ members choose to ramp up oil production, the increased supply of crude oil would obviously result in lower prices. If both scenarios play out, crude oil will drop back under $100 per barrel. On the other hand, if Russia continues its invasion and if OPEC+ decides against production increases, we will likely see crude oil surge back to $130 per barrel and potentially higher.

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