Oil prices were climbing on Friday after China eased some COVID-19 restrictions, with support for the commodity also stemming from relief surrounding U.S. inflation data that weighed on the dollar. Crude is still poised for weekly declines, however.
West Texas Intermediate crude for December
delivery jumped $2.05, or 2.3%, to $89.02 a barrel, after Thursday’s close of $86.47 a barrel on the New York Mercantile Exchange. U.S. crude was looking at a drop of 4.3% for the week as of Thursday, according to FactSet data.
January Brent crude
the global benchmark, climbed $2.08, or 2.2%, to $95.73 a barrel, after settling up 1.1% to $93.67 a barrel on ICE Futures Europe on Thursday.
Back on Nymex, December gasoline
prices rose 2.3% to $2.6264 a gallon, while December heating oil
% rose 1.6% to $3.6299 a gallon.
December natural gas
was flat at $6.245 per million British thermal units.
Market drivers Lifting hopes for a boost to demand for commodities such as oil, China announced Friday that it was cutting quarantine time for incoming travelers to five days from seven, with 3 days of home isolation. Those travelers will also now be allowed to enter with one negative PCR test taken within 48 hours of traveling, down from two. And airlines will no longer be threatened with a two-week long flight suspension if they bring in five or more positive travelers. However, those measures came as Beijing shut city parks and moved classes online for students, amid a fresh wave of COVID-19 cases, while more than 5 million remain locked down in the manufacturing hub of Guangzhou. “Another factor that traders are also celebrating is the drop in the U.S. inflation reading which means that economic growth is less likely to be impacted adversely,” said Naeem Aslam, chief market analyst at AVA Trade in a note to clients. Apart from potentially easing some pressure on the Federal Reserve to continue on its path of higher interest rates, oil rose as the dollar fell another 0.6%, based on the ICE Dollar Index
Thursday’s softer-than-forecast inflation triggered a 1,200-point advance for the Dow Jones Industrial Average
its best day since March 2020. “Having said that, we think it will still be highly challengingly for the oil prices to rise above the $100 mark as demand is still weak due to tepid economic growth,” added Aslam.