Crude oil grades were mixed once again on Tuesday on expectations of an easing of China’s strict COVID-19 controls, with Brent slipping 15 cents, or 0.2 percent, to settle at $83.03 a barrel, and West Texas Intermediate (WTI) from the United States. appreciating 96 cents, or 1.2 percent, to $78.20 per barrel.
Chinese health officials said the country plans to speed up COVID-19 vaccines for the elderly, aiming to overcome a key hurdle in efforts to ease its zero-COVID restrictions that had become unpopular.
The move is seen as a crucial element in a strategy to undo nearly three years of tough restrictions that have eroded economic growth, disrupted the lives of millions and sparked unprecedented weekend protests.
The country’s National Health Commission (NHC, for its acronym in English) said yesterday that it would target more vaccines to people over 80 years of age and reduce the gap between basic vaccination and booster vaccinations for the elderly to three months.
Prices were also supported by the weakness of the US dollar, which tends to trade inversely with oil. The dollar index has fallen to 106.65 from a 20-year high as investors expect the Federal Reserve to hit a top rate early next year and inflationary pressures are expected to ease.
Oil prices were also hampered by concerns that the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, would not adjust their production plans at their next meeting on December 4.
According to Reuters, five OPEC+ sources said the cartel was likely to keep oil production policy unchanged at its meeting on Sunday, while two sources said a further production cut was also likely to be considered.
However, it was also concluded that neither thought another outage was very likely.
OPEC+ began cutting its production target by 2 million barrels per day in November, with the aim of boosting oil prices.
As the year enters its final month, markets are assessing the impact of an impending Western price cap on Russian oil.
Diplomats from the Group of Seven (G7) nations and the European Union (EU) have been discussing a cap for Russian oil between $65 and $70 a barrel, with the aim of limiting revenues to finance Russia’s military offensive. Russia in the Ukraine without disrupting world oil markets.
So far, EU governments have failed to agree on the cap, with Poland insisting that it should be set below the level proposed by the G7.
If there is no deal, the EU will implement tougher measures agreed at the end of May: a ban on all imports of Russian crude oil from December 5 and petroleum products from February 5.