Saudi Arabia's Production Cut Increased Oil Prices

Saudi Arabia's Production Cut Increased Oil Prices Saudi Arabia's production cut has increased the oil prices. Oil hit an 11-month high after the production cut decision. Brent oil, which reached $ 70 at the beginning of 2020, experienced a sharp decline in the first quarter of the year due to quarantine and low production caused by the coronavirus epidemic. Spot price, which declined to the level of $ 19 in April, saw the lowest level after 2002. The spot price gained momentum towards the $ 46 level until September, with controlled normalization steps taken. On the other hand, the rise did not erase the losses that occurred in March, and the price fell to $ 36 with tightened measures due to the increase in the number of cases, especially in Europe and the USA, since September. Despite the coronavirus epidemic, in November, the prices of the global markets, which recovered with the pricing of the supports, closed the year 2020 above the level of 51 dollars. In this process, the supply cut decisions of oil producing countries did not cause a serious change in prices, and the reason for this was the lack of supply due to low production. In the first trading week of the new year, no results were obtained from the meetings held by OPEC+ members. In contrast, Saudi Arabia unexpectedly announced that it would cut its daily production by one million barrels in February and March. Prices, which lost almost 2 percent at the beginning of the week, started to rise after the supply cut decision. Thus, Brent oil reached the level of $ 54.50 today and reached its peak after February 26. The course of oil prices created a positive atmosphere in the financial markets and the indices maintained their positive course thanks to this increase. While the gain in energy stocks in the USA and Europe exceeded the level of 5 percent, BIST electricity in Turkey tested the highest score of 92.36 today. The earning of the index this week was recorded as 4.75 percent.