When Russia announced plans to cut oil production by 500,000 bpd in March, oil prices rose. The plans were a response to Western price restrictions, according to Deputy Prime Minister Alexander Novak.
Crude oil prices should have ended the week generally higher, although the rise in prices began to fade in the second half of the week, as the Fed signaled that it would continue to raise rates, and demand from China was not impressive.
Russia's announcement means that oil prices will rise significantly. West Texas Intermediate crude is already up nearly 10% since the start of last week.
Reports on crude oil stocks in the U.S. put pressure on oil prices last week. According to the Energy Information Administration, crude oil inventories rose for the fourth straight week and are now above the five-year seasonal average.
Expectations of stronger oil demand in China continue to support prices. Analysts at ANZ Bank said they expect China's oil consumption to increase by about 1.0 million barrels a day this year, with strong growth beginning at the end of the first quarter, Reuters reported.
Meanwhile, Bloomberg noted that some options traders expect Brent oil to return to $100 by May.
This is much sooner than many had estimated. Indeed, investment banks such as Morgan Stanley and Goldman Sachs are predicting a return to $100 in the second half of the year.
