(Bloomberg) — OPEC+’s surprise oil-production cut sent shock waves through financial markets and pushed crude prices up by the most in a year. Now that the dust has started to settle, one question looms large: Will that price rally stick, or fade away?

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Banks from Goldman Sachs Group Inc. to RBC Capital Markets LLC raised their oil-price forecasts immediately after the OPEC+ cut. Yet, many traders still believe a souring economic outlook will block the group’s actions from pushing prices higher. Demand indicators are also starting to flash warning signs.

It could end up being the ultimate test of what matters more to the market: tighter supplies, or the lackluster demand picture. That will likely bring more uncertainty over the direction of prices — a complicated development for the Federal Reserve and the world’s central bankers in their ongoing battle against inflation.

“It’s a very hard market to trade right now,” said Livia Gallarati, a senior analyst at Energy Aspects. “If you’re a trader, you are pulled between what’s happening at a macroeconomic level and what’s happening fundamentally. It’s two different directions.”

Read More: OPEC+ Shock Cut Aims to Make Oil Speculators Think Twice

One thing that is certain: A major shift of market control into the hands of Saudi Arabia and its allies has now been cemented, with huge implications for geopolitics and the world’s economy.

Investors have continued to reward US drillers for production discipline, making it unlikely that shale companies will ever again undertake the kind of disruptive growth that helped to keep energy inflation tame last decade. That leaves the oil market under the purview of OPEC+ at a time when some experts have predicted that demand is heading to a record.

“The surprise OPEC cuts have already triggered fears of a resurgence in inflation,” said Ryan Fitzmaurice, a lead index trader at commodities brokerages Marex Group Plc. “These renewed inflation concerns should only increase” in the months ahead, he said.

Here is an overview of what traders will be watching in the oil market.

Summer Demand

The timing of OPEC’s decision has struck an odd chord for many oil experts.

The production cuts don’t take effect until May, and much of the repercussions are likely to be felt in the second half of the year. That’s a time when oil demand typically reaches its seasonal peak, partly thanks to the busy summer driving season in the US. It’s also the point when China’s economic reopening is expected to start swinging into full gear, further underpinning demand.

Typically, OPEC would want to take advantage of that consumption burst by selling into the market as much as possible. Instead, the cut means the cartel is holding back. That’s sparking debate about whether the move will end up driving oil prices to $100 a barrel as demand surges, or whether, instead, the cartel and its allies are preparing for a recession-marked summer of tepid consumption.

“While OPEC+ cuts on the surface are generally seen as bullish, it does also raise concerns over the demand outlook,” said Warren Patterson, head of commodities strategy at ING. “If OPEC+ were confident in a strong demand outlook this year, would they really feel the need to cut supply?”

Moves in global fuel markets underscore the demand skepticism. While oil prices rallied, moves for refined products were less pronounced, shrinking margins for refiners across Europe and the US. In Asia, prices of diesel, a key refinery product, are signaling heightened slowdown concerns as timespreads shrink to their lowest since November.

Elevated Stockpiles

While US inventories have been declining, global inventories are still high.

In the first quarter, commercial oil stockpiles held in OECD countries were sitting about 8% above last year’s levels, according to estimates from the US Energy Information Administration. That’s a fairly sizeable buffer and a sign of the weakness in consumption that’s plagued the market in the past few months.

“You do need to chew through that overhang first before we can see we upside,” said Gallarati of Energy Aspects.

Russian Flows

Oil bulls have waited in vain for a Russian output cut promised for March to show up. The Kremlin said it would slash production by 500,000 barrels a day in March in retaliation for import bans and price caps imposed by “unfriendly countries.” But there’s been no sign of lower Russian output showing up in the one measure that matters to global crude markets — the number of barrels leaving the country.

Crude shipments from Russia’s ports hit a new high in the final week of March, topping 4 million barrels a day. That’s 45% higher than the average seen in the eight weeks before Moscow’s troops invaded Ukraine and has been boosted by the diversion since January of about 500,000 barrels a day delivered by pipeline directly to Poland and Germany.

Shale’s Production Discipline

It wasn’t long ago that there were two major players that oil traders turned to for direction over supplies: the Organization of the Petroleum Exporting Countries and the US shale industry.

At the time, OPEC and shale were locked in a battle for market share. It was a feud that helped to keep global oil prices — and energy-driven inflation — at bay for the better part of decade.

Then the pandemic hit, and with it an oil price rout that suffocated the shale industry. For the last three years, even as the market recovered and cash flow surged, companies have prioritized dividends and share buybacks over new drilling. It’s been a winning strategy. Since March 2020, the S&P 500 Energy Sector Index has surged almost 200%, outpacing the S&P 500’s nearly 60% gain.

Now, as calls for peak shale output gather pace, OPEC has one less factor to consider when making supply decisions.

That’s a sore spot for President Joe Biden, who was quick to downplay the impact of the decision by the cartel and its allies to cut output by more than 1 million barrels per day. Biden vowed after an initial production cut last year that there would be “consequences” for Saudi Arabia, but the administration has yet to follow through.

Read More: Investors Unloaded Saudi Arabian Bonds After Surprise OPEC+ Move

Futures Curve

Talk of $100 oil has been buzzing since the end of last year, but it seems like the can keeps getting kicked down the road. First, some analysts had predicted prices would reach that threshold in the second quarter of 2023. The view got pushed into the second half of the year, and now even some of the bigger bulls aren’t expecting the magic number to come into play until 2024.

The oil futures curve is reflecting those expectations. Prices for contracts tied to deliveries as far out as December 2024 and 2025 have rallied, even as benchmark front-month futures are starting to ease.

“The OPEC+ output cut certainly raises the possibility of $100 a barrel this year, although it is by no means a certainty,” said Harry Altham, an analyst at brokerage StoneX. “Demand-side weakness stemming from growth considerations is clearly taking a more prominent role.”

–With assistance from Julian Lee, Grant Smith, Chunzi Xu, Kevin Crowley and Mitchell Ferman.

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