Oil prices were near flat during a choppy trading session on Friday, as worries about inflation dampening demand for oil contended with news that China is considering easing COVID-19 quarantine measures for visitors.
Brent crude futures fell 3 cents to settle at $92.38 a barrel.
U.S. West Texas Intermediate crude for November delivery, which expires on Thursday, rose 43 cents to $85.98 per barrel. WTI for December delivery edged down 1 cent at $84.51 per barrel.
Both Brent and WTI earlier gained by over $2 per barrel.
To fight inflation, the U.S. Federal Reserve is trying to slow the economy and will keep raising its short-term rate target, said Federal Reserve Bank of Philadelphia President Patrick Harker on Thursday.
The U.S. dollar index pared losses after the comments, weighing on oil prices. A stronger dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.
“Harker is saying that the war on inflation has just begun,” said Phil Flynn, analyst at Price Futures Group in Chicago. “So it seems like the market is getting nervous.”
Supporting prices, however, Beijing is considering cutting the quarantine period for visitors to seven days from 10 days, Bloomberg news reported on Thursday, citing people familiar with the matter.
“That’s been seen as a positive demand indicator for the market,” said Bob Yawger, director of energy futures at Mizuho in New York.
China, the world’s largest crude importer, has stuck to strict COVID curbs this year, which weighed heavily on business and economic activity, lowering demand for fuel.
A looming European Union ban on Russian crude and oil products, as well as the output cut from the Organisation of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, have also supported prices.
OPEC+ agreed on a production cut of 2 million barrels per day in early October.
Separately, U.S. President Joe Biden announced a plan on Wednesday to sell off the rest of his release from the nation’s Strategic Petroleum Reserve (SPR) by year’s end, or 15 million barrels of oil, and begin refilling the stockpile as he tries to dampen high gasoline prices ahead of midterm elections on November 8.
The announcement, however failed to ease oil prices, as official U.S. data showed that the SPR last week dropped to their lowest since mid-1984, while commercial oil stocks fell unexpectedly. –Reuters