Will the rise of petrol prices continue?

The decision to cut production, released Sunday at OPEC, was the surprise of the week for world markets. A statement from Saudi Arabia, one of the organisation's leading members, said the decision to cut production was taken as a precautionary measure to prevent a deeper fall in oil prices. OPEC + Member countries are expected to cut production by a total of 1.2 million barrels per day from May to the end of the year. The decision to cut production came at a time when inflation concerns persisted and central banks' monetary exit strategies were under discussion. In theory, a reduction in oil supply should lead to inflationary pressures on the supply side.
In terms of geopolitical balance, it can be said that this decision by OPEC is a lifeline for Russia. Due to its occupation of Ukraine, Russia has been economically affected by sanctions imposed by Western countries for some time. The increase in oil prices means more foreign exchange earnings for Russia, which is a net exporter of energy. Although tensions on the U.S.-Russia-China axis have not yet subsided, this decision by OPEC has prompted Washington to respond. Biden has been calling on OPEC members to increase production for some time. U.S. Treasury Secretary Janet Yellen stated that the group's OPEC + decision to cut production was not constructive and contributed to uncertainty about global growth and inflation. On the other hand, it was known that the Biden administration "has been discussing for some time with members of Congress a bill called "NOPEC" to limit the control of the group OPEC over oil prices. Power struggles between OPEC and the U.S. have existed since the 1973 oil crisis that led to a global plunge in oil prices in 2011, with the Obama administration strategically targeting shale oil production. The Biden administration, on the other hand, holds the trump card of strategic oil reserves in response to supply-side measures from OPEC. 450 million barrels of oil stored in the states of Texas and Louisiana are on standby as a precautionary measure for emergencies.

Will Brent Oil Head To 100 USD Levels?

The price of a barrel of Brent oil, which traded at $120 on futures markets in the summer of 2022, has fallen to $70 due to recession concerns and confidence issues in the banking sector. After the decision to cut production on Sunday, oil prices on futures markets rose by more than 6%. If the member countries of OPEC + actually implement the cuts, it is expected that production, which has been tight since October, will be curtailed even more. In the event of increased mobility and high oil demand in the summer months, the barrel price of Brent oil could reach the USD 100 mark again in the long term. It can be assumed that the supply side will have an impact on oil prices in the short and medium term and the demand side in the long term. The fact that short positions had to be closed on the markets due to the surprise effect suggests that the upside potential for the U.S. oil grade WTI will be strengthened. Institutions such as the International Energy Agency expected record demand for oil in 2023 as the Chinese economy opened. After the developments in the first quarter, demand remains below expectations. If we see a recovery on the demand side, the level of 83 USD, crossed by the 200-day moving average, could appear as the first resistance point. In case of possible setbacks, 75 USD and 72 USD can be noted as main support levels.