Oil recovered after volatile session, OPEC+ decision in the spotlight

Investors managed to shake oil prices by manipulating speculation about supply and demand. It was unclear what supply would be, and there were fears that demand would fall in China due to COVID-19 restrictions. However, the oil prices succeeded to recover.

According to Bloomberg reports, oil prices were driven down by OPEC+'s announcement of a possible increase in oil production. However, immediately after Saudi Arabia announced its disagreement, prices rose to previous levels and stabilized.

Nevertheless, the situation in China remains in the spotlight, as cases of COVID-19 increase and officials insist on complete or partial movement restrictions. Under such conditions, it’s unclear what will happen to the demand for oil in the country.

Oil prices have already fallen this month. This is because concerns about demand still remain and investors are waiting for sanctions to be imposed by the European Union against Russian shipping. Also, the G7 is expected to present a plan for price caps.

Russia plans to stop the supply of oil to those countries that will accept any caps imposed by the G7. The Price caps will be announced on Wednesday. According to Stephen Innes of SPI Asset Management, it will be good for the market, but the risks of retaliatory action by Russia remain.