LONDON, Dec 2 – Crude oil futures were steady on Friday, on track to end the week higher, ahead of Sunday’s meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) and entry The European Union ban on Russian crude came into effect on Monday.
* As of 1008 GMT, Brent crude futures were up 14 cents, or 0.2%, at $87.02 a barrel, and US West Texas Intermediate (WTI) futures were up 5 cents, or 0. 1%, at $81.27.
* Both benchmarks declined early in the session, but were on track for their first weekly gains – their biggest in two months, around 4% and 6%, respectively – after three straight weeks of declines.
* Sending bullish signals, China is set to announce an easing of its COVID-19 quarantine protocols within days, sources told Reuters, which would mark a major policy shift in the world’s second-biggest oil consumer, though Analysts warn that a meaningful economic reopening is likely months away.
* Crude prices were also supported by the dollar, which usually trades inversely to oil and hit five-month lows.
* Meanwhile, EU governments tentatively agreed to a cap of $60 a barrel for seaborne Russian crude, with an adjustment mechanism to keep the cap 5% below market price, according to diplomats and a document. to which Reuters had access.
* OPEC+ is also expected to stick to its latest target of cutting oil production by 2 million barrels a day when it meets on Sunday, but some analysts believe crude prices could fall if the group doesn’t make further cuts.
* “This week’s price rally pushed Brent close to the $90 a barrel threshold and could dampen the appetite of (OPEC+) leaders for further price-friendly cuts,” said Stephen Brennock, analyst of MVP.
* “That said, the prospect of lower oil demand by China and the release of more strategic oil reserves by the United States could prompt preemptive action by the alliance. In any case, the ingredients are there for prices to skyrocket on Monday morning,” he added.