The violence in Libya caused oil to surge. But even as the situation worsened into the settlement, the oil price started to fall back.
The earthquake in Japan speeded up that retracement, both by pushing Libya off the front page, and by predictions that oil demand in Japan would decrease, even though lost nuclear power will have to be replaced.
Recently oil price movement is mainly the result of manipulation by the major firms.
Fundamental demand and supply plays only a small part in the price moves. There was no actual change in either demand or supply that would boost the price $20 over one night.
This week the 98.25 area needs to hold to prevent the price from falling. As long as price moves above 101.25 line, it will be pushed back up to the 105 level again.
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Oil Daily Chart
