Oil price jumps by 3% as China eases COVID curbs

 Oil prices jumped by about three per cent on Friday after health au­thorities in Chi­na, the top global crude importer, eased some of the country’s heavy COVID curbs.

Brent crude futures rose $2.86, or 3.1 per cent, to $96.53 a barrel by 1145 GMT, extending a 1.1 per cent rise in the previous session.

U.S. West Texas Intermediate (WTI) crude futures gained $2.87, or 3.3 per cent, to $89.34 a barrel, after climbing 0.8 per cent in the previous session.

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

“The first small steps towards easing of the regulations that were announced by the Chinese gov­ernment this morning allowed oil prices to climb again, even though this by no means constitutes a departure from the country’s strict zero-COVID policy, in our opin­ion,” Commerzbank said.

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

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

Still, the benchmark oil con­tracts were headed for weekly declines due to rising U.S. oil in­ventories, and lingering fears over capped fuel demand in China amid an uptick in daily COVID cases.

China’s COVID-19 case load soared to its highest since the lockdown in Shanghai earlier this year. Both Beijing and Zhengzhou reported record daily cases.

Besides work-from-home orders reducing mobility and fuel demand, travel across China re­mained subdued as people wanted to avoid the risk of being caught up in quarantine, ANZ Research analysts said in a note. — Reuters. com

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