Oil prices rose on Friday, but fell on a weekly basis despite health officials in China eased the country’s heavy COVID-19 restrictions and raised hopes for economic activity and demand recovery in the world’s largest importer of crude oil.
Brent crude futures rose $2.32 to settle at $95.99 and continued to rise 1.1% from the previous session, but fell 2.6% on a weekly basis.
West Texas Intermediate (WTI) crude futures settled at $88.96 a barrel, up $2.49, or 2.9%, after falling 0.8% in the previous session, but about 4% on a weekly basis.
The curbs easing include shortening quarantine times for close contacts of cases and inbound travelers by two days, as well as removing penalties for airlines bringing infected passengers.
Benchmark oil contracts fell throughout the week amid rising US oil inventories and the fears of limited fuel demand in China, but weekend gains capped losses.
China’s shifting response to stubbornly high COVID-19 cases has contributed to the oil market’s price volatility, and if this new Chinese policy continues, the energy complex could wipe out much of this week’s decline.
A weaker US dollar also supported oil prices as it made commodities cheaper for buyers of other currencies.
Prices also rose on Friday after milder-than-expected US inflation bolstered hopes the Federal Reserve will slow rate hikes and increase chances of a soft landing for the world’s largest economy.
Saudi Arabian energy minister Prince Abdulaziz bin Salman stated that OPEC+ will continue to be cautious about oil production, noting that members see “uncertainties” in the global economy ahead of the bloc’s next meeting in December.
The Organization of the Petroleum Exporting Countries and its Russia-led allies, known collectively as OPEC+, agreed on steep production cuts last month and will meet again on December 4 to determine the next policy.
China’s COVID-19 caseload rose to its highest level since the lockdown in Shanghai earlier this year. Both Beijing and Zhengzhou reported record daily cases.
Aside from working from home, which reduces mobility and fuel demand, travel has remained suppressed across China as people want to avoid the risk of quarantine.