Oil prices rose on Friday, despite low market liquidity, after a week marked by concerns about Chinese demand and a cap on Russian oil prices.
How prices have changed
Brent futures rose 41 cents, or 0.48%, to trade at $85.75 a barrel by 0730 GMT.
Futures for West Texas Intermediate (WTI) rose 57 cents, or 0.73%, from Wednesday’s close to $78.51 a barrel. There were no WTI settlements on Thursday due to the Thanksgiving holiday in the US.
Both contracts were still heading for their third straight weekly decline, on track to drop by about 2% or more on concerns about a tight supply easing.
Reasons for price change
Worries about demand in China and an estimate of how severe a recession could be are key price drivers at the moment, said Virendra Chauhan, APAC chief analyst at Energy Aspects.
There are growing signs that the surge in COVID-19 cases in China, the world’s largest oil importer, is starting to affect fuel demand, with traffic declining and estimated oil demand at around 13 million barrels per day, or 1 million barrels. per day below the average, analysts say.
On Friday, China reported a new daily record for COVID-19 infections, and cities across the country continued to implement mobility measures and other restrictions to control outbreaks.
The outbreak of COVID cases in China remains the main bearish factor affecting oil prices in terms of demand, said Tina Teng, market analyst at CMC.
As far as the price cap for Russian oil is concerned, G7 and European Union diplomats are discussing levels between $65 and $70 a barrel to limit revenues to finance Russia’s invasion of Ukraine without disrupting global oil markets.
“The market considers (price caps) too high, which reduces the risk that Moscow may retaliate,” ANZ Research analysts said.
Russian President Vladimir Putin said that Moscow will not supply oil and gas to any countries that join in imposing a price cap, which the Kremlin repeated on Thursday.
Source : Epravda