Brent crude for January delivery rose by 4.11 percent, ending the day at $98.57. In the session, it went up to 98.72 dollars, which was the highest it had been in almost four weeks.
As for the price of a barrel of American West Texas Intermediate (WTI), it went up by 5.03%, to 92.61 dollars, for delivery in December.
Bart Melek of TD Securities says that the rise in prices on Friday is due to hopes that China will loosen some of its health rules.
Zeng Guang, who used to be the head epidemiologist at the Chinese Center for Disease Control and Prevention, added to the rumors that had been going around for a few days.
The scientist told Reuters that a new health policy would be put in place in 5 to 6 months, but he didn’t say where he got this information.
The barrel of Brent is again approaching 100 dollars
“The situation is changing,” Zeng Guang said at a conference put on by Citigroup, and Reuters reported that “the zero-COVID-19 policy will also see major changes.”
Bart Melek said, “That would mean that we’ll have stronger demand from China.” He still thought that the market’s reaction was too strong, though.
“Even if the restrictions in China are lifted,” the analyst said, the country’s economy would still be “in trouble” and in the middle of a big slowdown.
After a mixed US employment report, the dollar fell, which helped prices because most oil contracts are made in this currency.
Price Futures Group’s Phil Flynn says that the rise in crude prices is “a rejection of the (Russian) oil price cap that is being put in place.”
The G7 plans to finish this mechanism, which it has been working on for more than four months, “in the coming weeks,” the group’s foreign ministers said in a joint press release on Friday.
He wants Russia to only be able to export oil that is sold for less than this threshold, which must be between the cost price and the market price. This will keep Russia from making too much money from the black gold trade.
Phil Flynn said, “The market thinks this won’t solve the problem and that this idea is doomed to fail.”
“If (Russian President Vladimir) Putin doesn’t like the price, he won’t sell,” says the analyst. “On a market that’s already tight, that will make prices go up.”
He also said that the measure might upset the Organization of Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ agreement, which might then think about cutting their production again.
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