Oil collapses under $100. China locks down all of Shanghai on Covid strain. Oil volatility could hit March 2022 highs if German and Europe starts stockpiling oil and gas on soon-to-be Russian oil bans. The Russian war machines carries on in Ukraine.

Europe will probably end up banning Russia's gas and oil imports, as the Russian war machine is showing no signs of relenting, despite it being a strategic failure, thus resorting to war crimes and brutality.   The oil price's dramatic drop from $105 on the 5th April  to $95 (Chart above), is on China shutting their capital Shanghai with a population of 26 million on the rise of BA.2 variant of Covid, that by all reports is as infectious as measles.   Maybe China is trying to get a handle of it the harsh way, knowing that the West, may be hit with a double whammy of a bad flu season plus the new Covid variants .  What ever the case for their policy of zero -Covid, it remains as their blunt instrument.  Hence the oil price under pressure.  But for how long?    As noted in this post, we could be in for some wild swings on the oil price if there are issues with Iran 'nuke' talks and more so, Europe/Germany finally setting a ban on Russian gas/oil which will most likely send the price back over $100.

As noted with the Oil Volatility index (OVX), the line below the 5 day oil chart, it does appear that volatility is picking up again in similarity to late March 2022 price swings.   

The final price support for oil is at $95, which if breached could send it down to $90, which I doubt.  Europe may begin an emergency stockpile of oil and gas, with energy restrictions before triggering the ban.