Oil Stocks: Will Supply Cuts Drive Prices Higher?

The price of oil-related stocks continues to rise despite recent global stock market crashes.
Fueling the bullish momentum in energy stocks are OPEC's supply cuts, which do not appear to have reached an end, even as ongoing conflicts in Ukraine and the Middle East threaten global supplies.
What is happening in global markets? The possible reduction in supply pushes up the demand for oil The possibility that OPEC chooses to cut production continues to push the price of oil upwards, while there is an overall increase in volatility, highlighted in the last trading sessions bag.
The OPEC+ summit kept the supply policy of the organization of exporting countries almost unchanged, therefore indicating a continuation of production cuts.
The oil futures market reacted positively to this statement, raising the possibility that there may be some shortage in oil supply given the recent recovery of the Chinese economy, while US macro data continues to show some resilience in the face of to the monetary policy choices of the Federal Reserve.
The market doesn't like the new geopolitical fears.
Supply risks are also growing due to the incessant Ukrainian attacks directed at Russian refining centers.
The country's own processing capacity is at risk, which represents a significant point of attention regarding oil supply.
Another element of interest in the market is undoubtedly the ongoing conflict in the Middle East: an expansion of the clashes could potentially cause serious supply disruptions, considering that Iran remains one of the largest producers within OPEC.
What is worrying is the response provided by Iranian President Ebrahim Raisi, who showed his intention to react to what appears to have been an air attack against the consulate in Damascus, which led to the killing of the Pasdaran commander Mohamad Reza Zahedi.
The tension was further exacerbated in the media following the conversation between President Joe Biden and Israeli Prime Minister Benjamin Netanyahu.
Oil and global stock markets, what is happening? These innovations have caused a significant increase in volatility in the price of raw materials, in particular those related to energy, with a particular focus on oil.
The CME's OVX Volatility Index rose 10% in the Thursday, April 4, and Friday, April 5 trading sessions alone.
After surpassing $80 per barrel, the price of WTI oil has recorded three extremely bullish sessions, highlighting a certain degree of concern regarding the current global geopolitical context.
The price of oil-backed stocks is growing, despite the collapse of the main market indices, such as the S&P500.
The S&P500 Energy index and the DJ Oil&Gas are among the few positive sectors this week.
The same in Europe, with the STOXX Europe 600 Oil & Gas, up 3.29%, positioning itself in first place in the ranking of the best performing indices.
The S&P500, on the other hand, is losing -2.04% while the Euro Stoxx 50 is contracting by 1.67% this week.