Oil rises amid hopes of easing Covid restrictions in China

Oil prices rose on Tuesday, amid expectations that China will ease strict restrictions related to Covid-19, but fears that the OPEC + group will keep its production unchanged at its next meeting limited the gains.

Brent crude futures settled at $83.03 a barrel, down 16 cents, or 0.2 percent, while West Texas Intermediate crude futures rose 96 cents, or 1.2 percent, to settle at $78.20 a barrel.

China’s health officials have said it intends to accelerate COVID-19 vaccines for the elderly, aiming to overcome a major stumbling block in efforts to ease unpopular “zero COVID” restrictions.

“The prospect of normalcy in an economy that is the world’s largest oil importer was enough to make oil prices jump in the first major price rebound over the past two weeks,” said Ricardo Evangelista, an analyst at ActivTrades.

Rare protests of its kind across China at the weekend targeted President Xi Jinping’s “zero Covid” policy, which analysts specializing in China said represented the strongest public challenge to him throughout his political history.

The dollar’s decline, which has an inverse relationship with oil, helped support crude prices. The dollar index fell to 106.65, abandoning the highest level in 20 years, as investors looked forward to the Federal Reserve reaching the peak of interest rates early next year, amid expectations of a decline in inflationary pressures.

But oil prices were affected by fears that the OPEC + group, which consists of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, will not adjust its production plans at its next meeting on December 4.