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OPEC+ Output Speculation And China COVID Limits Boost Oil Prices

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OPEC+ Output Speculation And China COVID Limits Boost Oil Prices

(CTN NEWS) – Oil climbed almost $1 a barrel on Thursday, bolstered by the potential for OPEC+ to cut supplies further and ease COVID regulations in China.

Crude benefited from dollar weakness caused by eurozone industrial statistics and the Federal Reserve Chair indicating rate hikes could be slowed.

A weakening dollar makes gasoline cheaper for foreigners and boosts risk assets.

OPEC+, which includes Russia, meets on Dec. 4. Wednesday sources indicated a policy change is unlikely, but others believe a further cut is possible.

“OPEC+ forces shorts to cover, but the consensus is stable quota levels,” said oil broker Tamas Varga.

The dollar’s decline and the perceived loosening of Chinese COVID restrictions support prices.

Brent crude rose 94 cents, or 1.1%, to $87.91 a barrel by 1250 GMT, while U.S. WTI crude futures rose $1.18, or 1.5%, to $81.73.

https://www.youtube.com/watch?v=f1DRWBdbOhg

China’s apparent turn away from zero-COVID boosts oil demand optimism. Guangzhou and Chongqing eased COVID restrictions Wednesday.

“China’s signals appear good,” said OANDA’s Craig Erlam. Any softening of COVID-zero is welcome.

Both oil benchmarks have posted three straight weekly drops, though the market has returned sharply after touching its lowest in nearly a year on Monday. Brent hit $80.61 on Jan. 4.

Analysts say a reduced Russian oil price cap is also helping. EU countries are nearing a price cap accord before Dec. 5. Weekly data on U.S. crude inventories also boosted prices.

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