OIL DOWN FOR THE WEEK

OIL PRICES settled higher on Friday but dropped week-on-week after health authorities in China eased some of the country’s heavy Covid-19 curbs, raising hopes for improved economic activity and demand in the world’s top crude importer.

Brent crude futures settled up $2.32 at $95.99 a barrel, extending a 1.1% rise from the previous session but falling 2.6% on the week.

US West Texas Intermediate (WTI) crude futures settled up $2.49, or 2.9%, at $88.96 a barrel, after climbing 0.8% in the previous session but down nearly 4% on the week.

The easing curbs include shortening quarantine times for close contacts of cases and inbound travelers by two days, as well as eliminating a penalty on airlines for bringing in infected passengers.

The benchmark oil contracts fell during the week due to rising US oil inventories, and lingering fears over capped fuel demand in China, but late-week gains limited the losses.

“China’s changing response to stubbornly high Covid-19 cases has added to the oil market’s price volatility and, should this new Chinese policy continue, the energy complex could be poised to erase most of this week’s decline,” said Jim Ritterbusch, president of Ritterbusch and Associates in Illinois.

A weaker dollar also supported oil prices as it makes the commodity cheaper for buyers holding other currencies.

Prices also picked up on Friday after milder-than-expected US inflation reinforced hopes that the Federal Reserve would slow down rate increases, boosting chances of a soft landing for the world’s biggest economy.

Opec+ last month agreed to steep production cuts, and will meet again on December 4 to set its policy.

China’s Covid-19 caseload soared to its highest since the lockdown in Shanghai earlier this year.