Brent oil soared at the thought of global supplies growing scarcer after Russia retaliated to western price caps with plans to lower its oil production by 500,000 barrels per day in March.

Prices for the global oil benchmark have now surged back into positive territory on a year-to-date basis, even as Brent tests its 100-day simple moving average for immediate resistance.

Still, Brent may yet require an even bigger catalyst to punch back above $90/bbl, amid persistent fears over weakening global demand ahead of a potential recession.

Russia’s decision to reduce its own output may not be enough to sway the broader OPEC+ alliance away from its wait-and-see approach, having kept its output settings unchanged at its meeting earlier this month.

Ultimately, the global demand outlook has to turn brighter in order for oil prices to be put on a sustainable path of recovering back towards recent heights.

Such a rosier outlook may be buffered if major central banks can soon pause on their policy tightening, though resurgent oil prices that keep global inflation stubbornly elevated and invite more rate hikes would only scupper such hopes.

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