Oil fell as market momentum deteriorated, and moderate wind chills in several areas of the world allayed worries of an energy catastrophe. The West Texas Intermediate crude oil price tumbled 4.2% to end at $77 a barrel, the worst loss until mid-November.
Oil dropped as equities market declines intensified, and the dollar soared to its highest level over three weeks, raising the cost of commodities traded in the currency.
Price fluctuations in the oil market
However, above-average weather in the United States and Europe has allayed worries of an energy crisis, which had been forecast to cause disruptions. Diesel futures have dropped, while natural gas has reached an 11-month lowest.
Crude made a slight rise in 2022, a year defined by unpredictability. Prices rose in the aftermath of Russia's incursion of Ukraine, only to fall again on fears of a worldwide recession.
In the following year, traders will be looking for Russia's response to energy measures, as well as the consequences in China from its abrupt departure from Covid Zero.
It's also unclear whether OPEC and its partners will restrict supplies further. Hedge fund investor Pierre Andurand is one of many predicting an increase in oil need if the globe is free of Covid limitations.