Oil Settles Higher, Posts Weekly Loss as China Eases COVID Restrictions
Nov 11 (Reuters) – Oil prices rose on Friday but fell week-on-week after Chinese health officials eased some of the country’s heavy COVID-19 restrictions, raising hopes for an improvement in economic activity and demand from the world’s largest importer of crude oil.
Brent crude futures settled at $2.32 at $95.99 a barrel, extending a 1.1% rise from the previous session but falling 2.6% on the week.
U.S. West Texas Intermediate (WTI) crude futures settled down $2.49, or 2.9%, at $88.96 a barrel, after climbing 0.8% in the previous session , but down nearly 4% over the week.
The easing restrictions include shortening quarantine times for close contacts of cases and incoming travelers by two days, as well as eliminating a penalty for airlines for bringing in infected passengers.
Benchmark oil contracts fell during the week on rising U.S. oil inventories and lingering fears about capping fuel demand in China, but weekend gains capped gains. losses.
“China’s shifting response to stubbornly high COVID-19 cases has added to oil market price volatility, and if this new Chinese policy continues, the energy complex could be on the verge of wiping out most of the decline this week,” said Jim Ritterbusch, president of Ritterbusch. and Associates LLC in Galena, Illinois.
A weaker US dollar has also supported oil prices as it makes the commodity cheaper for buyers holding other currencies.
Prices also rallied on Friday after softer-than-expected U.S. inflation bolstered hopes the Federal Reserve would slow rate hikes, raising the odds of a soft landing for the world’s largest economy.
Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ would remain cautious on oil production, noting members saw “uncertainties” in the global economy ahead of the bloc’s next meeting in December, Bloomberg News reported on Friday.
The Organization of the Petroleum Exporting Countries and its Russia-led allies, collectively known as OPEC+, agreed to deep production cuts last month and will meet again on Dec. 4 to set policy.
The number of COVID-19 cases in China has risen to its highest level since lockdown in Shanghai earlier this year. Beijing and Zhengzhou have reported record daily cases.
Along with work-from-home orders reducing mobility and fuel demand, travel across China remained subdued as people wanted to avoid the risk of being quarantined, ANZ Research analysts said in a note. .
Additional reporting by Ahmad Ghaddar in London Sonali Paul in Melbourne and Jeslyn Lerh in Singapore; edited by David Evans, Tomasz Janowski and Jonathan Oatis
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