Oil prices jump 2% as China eases covid curbs

Market


NEW DELHI: Global crude oil prices surged on Friday after authorities in China relaxed some of the stringent Covid-related restrictions.

At 3.25 pm, the Brent January contract on the Intercontinental Exchange was at $95.73 a barrel, up 2.20% from previous close. The December contract of West Texas Intermediate (WTI) rose 2.32% to $88.48 a barrel.

On Friday, health authorities in China announced that quarantines for inbound travelers will be cut from 10 days to eight, consisting of five days in a state isolation centre and three days at home. China is world’s third largest oil importer and ease in restrictions have led to hopes of improved demand as lockdowns hurt mobility.

China’s ‘Zero-Covid’ policy has so far significantly impacted the country’s economic activities and investor sentiment.

Analysts also said that prices were supported by a weaker dollar and lesser-than-anticipated inflation rate in the US. Data showed that the US consumer price index rose 7.7% year-on-year in October, which was less than expected, and the smallest increase since January.

A weaker US dollar also supported oil prices as it makes the commodity cheaper for oil importing countries holding other currencies.

Rahul Kalantri, vice president for commodities at Mehta Equities, said, “Moderating US CPI data coupled with the fall in dollar index and the bond yields supported global commodities, including crude oil. We expect crude oil prices to remain volatile in today’s session amid fluctuation in the dollar index and international oil prices.”

Despite volatility in the international prices, domestic petrol and diesel prices remained unchanged on Friday. In the national capital, petrol was priced at 96.72 per litre and diesel was sold for 89.62 a litre. Petrol and diesel prices have been unchanged since May 21.

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