Overnight, Oil Rose to Nearly $120/Barrel. Now, It’s Less Than $100/Barrel. What Happened?

As soon as futures trading opened yesterday evening, oil prices surged past $100/barrel and continued to climb, reaching as high as $119.50/barrel around 1 AM. Then, they tumbled and tumbled, and now oil - while still more expensive than it was on Friday - costs less than $100/barrel. And my only question is: why?

Oil prices surged because Kuwait and Iraq had to reduce their outputs, Iraq by as much as 70 percent. Disruptions in the Strait of Hormuz continue, and oil infrastructure remains a target. Yet, oil prices have dropped considerably over the past few hours. I even needed to make sure there wasn’t a surprise ceasefire announcement this morning (there wasn’t).

Per the AP and some other sources, oil prices dropped after countries announced plans to limit the rise in prices. The G7 convened to discuss releasing strategic oil reserves, but they said they were “not there yet” when the meeting adjourned. Prices have continued to fall anyway. Macron also announced that France is going to deploy warships in the Red Sea and possibly the Strait of Hormuz, which likely contributed to the drop. For Trump’s part, he said the spike in oil prices will be short and worth it, though a spokesperson for him gave no details on his plans to combat rising oil prices in the short term.

Did people just freak out then calm down, or are meaningful steps toward opening the strait or ending the war being taken without my knowledge. The price of oil dropped over 20 dollars in less than 12 hours, so I feel as though something must be happening.