By Ambar Warrick
Investing.com– Oil prices rose on Friday, taking support from weakness in the dollar on some less hawkish signals from the Federal Reserve, but were headed for steep weekly losses as the outlook for demand worsened and as concerns over tightening supply eased.
Crude markets fell sharply in recent sessions as record-high daily infections in China ramped up concerns over weakening oil demand.
The world’s largest oil importer introduced strict lockdown measures in several major cities – a trend that has decimated the country’s economic growth this year, hurting its appetite for crude.
Weak economic prints from the U.S., Japan, and China also showed that global economic growth was likely to trend lower, weighing on crude demand.
Brent oil futures rose 0.5% to $85.51 a barrel, while West Texas Intermediate crude futures rose 0.5% to $78.31 a barrel by 21:35 ET (02:35 GMT). Both contracts were set to lose over 2% this week, their third consecutive week of losses.
Easing worries over tight supply also dented oil prices this week. The Group of Seven nations, or G7, was seen applying a much higher-than-expected price cap on Russian oil sales.
The prospect of a $65 to $70 a barrel price cap on Russian oil sales dispelled fears that Moscow will slash oil exports to prevent selling at a loss.
But Russian President Vladimir Putin has said that the country will not supply oil and gas to any countries that support the price caps. The price caps are expected to go into effect from Dec. 5, when the European Union will also impose a ban on all Russian energy imports.
Focus next month is also on a meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+) on Dec. 4. A 2 million barrel per day supply cut announced by the OPEC+ in October was seen going into effect this month.
Markets will be watching for the announcement of any more such measures, particularly after OPEC+ leader Saudi Arabia reiterated its commitment to supporting crude prices earlier this week.