Oil prices fluctuate on easing Covid-19 restrictions in China, ‎dollar rise ‎

Oil prices witnessed volatile performance today, Friday, as hopes for further easing of Corona virus restrictions in China and what may follow from a recovery in demand in the second largest economy in the world boosted market sentiment, but the rise of the dollar limited the gains.

According to Reuters, Brent crude futures fell one cent, or 0.01 percent, to $86.87 a barrel by 0731 GMT, after earlier rising to $87.40.

West Texas Intermediate crude futures fell 21 cents, or 0.3 percent, to $81.01 a barrel, after rising to $81.63 earlier in the session.

The two contracts are heading to achieve the first weekly gains after declines for three consecutive weeks.

Sources said that China is preparing to announce an easing of the rules of quarantine for Covid-19 in the coming days, along with a reduction in mass testing, which will represent a major shift in the country’s policy after the most stringent restrictions in the world caused widespread protests and public anger.

These expectations did not reflect positively on the oil market due to the rise of the dollar, whose performance is usually inversely proportional to oil prices. The dollar rose from its lowest level in 16 weeks against a basket of major currencies after data showed that consumer spending in the United States increased strongly in October.

Meanwhile, diplomats revealed that EU governments had agreed in principle to apply a cap to the price of Russian oil transported by sea at $60 a barrel, with an adjustment mechanism to keep the price 5% below the market level.

An EU diplomat said that all EU governments must agree in writing to this decision no later than Friday. So far, Poland, which has sought to lower the price cap as much as possible, has not confirmed that it will support the deal.