01.04.202112:50 Forex Analysis & Reviews: Oil prices increased by more than 20% in the Q1. What will happen next?

According to the results of Wednesday's trading, the June contract for Brent declined to $62.74 per barrel. Thus, the North Sea oil mix lost 2.7%. The Texas brand also plunged to $ 59.16. As a result, there was only a 2.3% difference with the previous session for the May WTI futures.

On Thursday morning, the situation changed. Oil prices are rising correctively. Earlier, Brent strengthened by 0.51% and is now worth more than $ 63. The value of the WTI benchmark is also moving up, namely by 0.61% at 5:00 Universal time. In monetary terms, the equivalent of this is $ 59.52. In this case, experts do not exclude that the latest data on American oil reserves, which were published the day before, could serve as a driver for oil's growth. The indicators declined by 0.9 million, contrary to experts' forecast of 0.1 million barrels.

At the same time, the upcoming OPEC+ meeting continues to have the greatest impact on the pricing of black gold, which is showing extremely high volatility these days. The event will be held today. The alliance is expected to make a decision on the parameters of the May deals. Most experts are inclined to believe that there will be no easing in this matter. PVM analyst Stephen Brennock recently voiced such an opinion, saying that OPEC+ will completely stick to its early strategy of reducing oil production. Just like before, the decisive prerequisite for the alliance will be serious concerns about demand caused by the next wave of COVID-19 globally. Brennock also suggested that the easing of the norms is most likely not expected in June.

It can be recalled that the alliance's decision to reduce oil production in February and March, which was taken at the beginning of 2021, immediately caused oil prices to sharply grow. So, the cost of both reference brands surged by 18% in February. This monthly increase was the best indicator in the oil market since November last year. For the entire first quarter, the price of oil increased by more than 20%. The previous period was meaningful for both Brent, which increased by 21%, and for WTI, which also did by 22%.

Analysts also estimated that for the entire month of February, the price of oil declined following the results of only five trading sessions. This continued strong growth was expected to cause a price correction in March. During the month, positive and negative indicators almost alternately replaced each other, but oil closed the last day with a decline. It is worth noting that such an end to the month in the oil market has not been observed since October 2020.