Jose Sequeira 
On Monday, oil prices rose following Russia‘s proposed cuts to their crude production and investors’ worries about short-term demand. Brent futures spiked 22 cents (0.3%) up to $86.61 a barrel, while U.S crude gained 42 cents or 0.5% at $80.14 per barrel – signs of an overwhelming increase! According to Phil Flynn from Price Futures Group, “The fundamental environment for oil is still incredibly positive with China reopening and both OPEC & Russia cutting supplies which only further bolsters the bullish sentiment.”
Russia Announced It Will Reduce Oil Production Against Western Sanctions
On Friday, oil prices surged to their highest level in two weeks after Russia indicated that it will reduce crude production by 500,000 barrels per day (bpd), or about 5% of output. This decrease was a response to sanctions imposed on its exports due to the Ukraine conflict.
The Brent and WTI contracts rose over 8%, buoyed by forecasted demand growth in China following the removal of Covid restrictions during December.
The U.S. Federal Reserve has taken action to combat inflation by raising interest rates, which may have an adverse effect on economic activity and oil demand. Consequently, there is a growing fear amongst citizens regarding the potential slowdown of the economy due to this move.
Earthquake in Turkey Raised Concerns About Oil Supply
Matthew Ryan, head of the market strategy at financial services firm Ebury, emphasized the momentousness of this single data point as traders and the Fed monitor the progressive decline in recent months. Moreover, a shipment from Azerbaijan’s Ceyhan port on Monday assuaged supply fears which had been stirred by an earthquake last February 6th. Ceyhan is both a storage and loading junction for conduits that transport oil from Iraq and Azerbaijan.
You might check: Cryptocurrencies May Be The Solution To South Korea’s Aging Population
