The price of U.S. oil falls more than 8%, dropping below $100 per barrel.

• On Monday, the price of U.S. oil fell below $100 per barrel, coinciding with discussions between Russia and Ukraine and the implementation of new Covid-19 lockdowns in China.
• The price of West Texas Intermediate crude futures, the U.S. oil benchmark, decreased by 8.75% to $99.76 per barrel.
• Despite the significant drop, Brent crude and WTI have still experienced a rise of over 30% in value this year.

On Monday, U.S. oil fell more than 8%, dropping below $100 per barrel, due to discussions between Russia and Ukraine and new Covid-19 restrictions in China, which may decrease demand.

The U.S. oil benchmark dropped 8.75% to $99.76 per barrel, while the international benchmark lost 8% to $103.68 per barrel.

In the afternoon, some of the losses were recouped. WTI ended the day 5.78% lower at $103.01 per barrel, while Brent finished at $106.90 per barrel, down 5.1%.

Rebecca Babin, a senior energy trader at CIBC Private Wealth U.S., attributed the declines in energy prices to a combination of geopolitical and demand factors. Russia and Ukraine were scheduled to resume peace talks on Monday, while China's March demand was expected to be revised lower due to new coronavirus lockdowns. Furthermore, open interest in Brent futures has decreased, indicating that financial players are reducing their risk.

Babin stated that the shift in sentiment in Russia/Ukraine has led sentiment traders to sell, while fundamental concerns about demand from China's Covid lockdowns have caused fundamental traders to take profits, and technical pressure as crude breaks key levels.

Last week's decline in WTI and Brent was the worst since November, and this trend continued on Monday with another sell-off.

Since Russia invaded Ukraine in late February, oil prices surged above $100, causing concerns about supply disruptions in an already tight market. This marked the first time oil had breached the triple-digit level since 2014.

Last week, WTI reached a high of $130.50 and Brent almost hit $140.

Oil prices have been experiencing significant fluctuations, causing the national average for a gallon of gas in the U.S. to reach a record high, exacerbating inflationary concerns throughout the economy.

Despite Monday's significant drop, Brent and WTI have still experienced a more than 30% increase in value for the year.

John Kilduff, partner at Again Capital, stated that the market has been spooked by the Covid lockdown in China and the high fuel prices worldwide, resulting in a demand scare for the first time in a while.