Oil prices rally after OPEC+ decision

Crude oil prices are on their biggest increase streak in a year following OPEC+’s surprise production cut decision. The OPEC+ rally in oil continues. The barrel price of West Texas Intermediate crude oil rose above $81 per barrel today after yesterday’s 6% rally. Oil prices have entered a recovery process after falling to their lowest level since mid-March 2021. The expectation that demand will increase as China lifts Covid-19 restrictions has been effective in this recovery. OPEC+ recently decided to cut oil production by more than 1 million barrels per day starting in May. According to sources familiar with the matter, OPEC officials decided that a policy change was needed after Brent crude oil fell to its lowest level in 15 months. US Treasury Secretary Janet Yellen criticized the OPEC decision and said it was not constructive. US President Joe Biden stated that the decision was ‘not as bad as thought’. Many Wall Street institutions, including Goldman Sachs, revised their price estimates upwards following the decision. Goldman Analysts noted that OPEC's pricing power has increased compared to the past. Morgan Stanley lowered its estimate, stating that China's demand fell short of estimates. Brent crude for June delivery is trading at $85.32, up 0.5 percent.