© Archyde.com. An oil field in Texas in a photo from Archyde.com archive.
From Shadia Nasrallah
LONDON (Archyde.com) – Oil futures were mixed on Friday ahead of a meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC +) on Sunday and the European Union’s ban on Russian crude starting next Monday.
Crude futures rose 37 cents, or 0.4 percent, to 87.25 a barrel by 1441 GMT. West Texas Intermediate crude futures rose 55 cents, or 0.7 percent, to $81.77 a barrel.
The two crudes had fallen earlier on Friday, but are now on their way to achieving their first weekly gains, which will be the largest in two months at about four percent and seven percent, respectively, after falling for three consecutive weeks.
Meanwhile, diplomats and a document seen by Archyde.com revealed that EU governments had agreed in principle to cap the price of Russian seaborne oil at $60 a barrel, with an adjustment mechanism to keep the price 5 percent below market level.
The cap, which was proposed to limit Russia’s revenue without driving up oil prices, still needs formal approval before the bloc’s sanctions on Russian crude take effect on Dec. 5.
Russia’s Urals crude was trading at around $70 a barrel on Thursday afternoon.
Two sources from Russia’s top producers said Russian oil production could fall by around 500,000 to 1 million bpd in early 2023 due to the European Union’s ban on seaborne imports from Monday.
It is widely expected that OPEC + will stick to the policy of reducing oil production by two million barrels per day during its meeting on Sunday, but some analysts believe that crude prices may decline unless the group decides to cut further.
Sources told Archyde.com that China is preparing to announce the easing of the Covid-19 quarantine rules within days, which would represent a major shift in the policy of the second largest oil consumer in the world, but analysts say that it is likely that economic activity will not resume significantly until after months.
It was also reinforced by the drop in the dollar index, whose performance is usually inversely proportional to oil prices, hitting its lowest level in five months.
(Prepared by Marwa Salam, Marwa Gharib, Mahmoud Abdel-Gawad and Rehab Alaa for the Arabic Bulletin – Edited by Ali Khafagy)