Oil prices rose in Asia on Friday, despite thin market liquidity, after a week marked by worries about Chinese demand and haggling over a Western price cap on Russian oil.

Brent crude futures rose by 28 cents, or 0.33 per cent, to trade at $85.62 a barrel at 0410 GMT.

US West Texas Intermediate (WTI) crude futures climbed 49 cents, or 0.49pc, from Wednesday’s close to $78.43 a barrel. There was no WTI settlement on Thursday due to the US Thanksgiving holiday.

Both contracts were still headed for their third consecutive weekly decline, on track to fall about 2pc with worries about tight supply easing.

“Oil is trading slightly higher in highly illiquid holiday-type trading, likely finding some support from lower global interest rates,” said Stephen Innes, managing partner at SPI Asset Management, in a client note.

On the Russian oil price cap, G7 and European Union diplomats have been discussing levels between $65 and $70 a barrel, with the aim of limiting revenue to fund Moscow’s military offensive in Ukraine without disrupting global oil markets.

“The market considers (the price caps) too high which reduces the risk of Moscow retaliating,” ANZ Research analysts said in a note to clients.

Russian President Vladimir Putin has said Moscow will not supply oil and gas to any countries that join in imposing the price cap, which the Kremlin reiterated on Thursday.

Trading is expected to remain cautious ahead of an agreement on the price cap, due to come into effect on Dec 5 when an EU ban on Russian crude kicks off, and ahead of the next meeting of the Organisation of the Petroleum Exporting Countries and allies, known as Opec+, on Dec 4.

In October, Opec+ agreed to reduce its output target by two million barrels per day through 2023, and Saudi Arabian Energy Minister Prince Abdulaziz bin Salman was quoted saying this week that Opec+ was ready to cut output further if needed.

Meanwhile, there are growing signs that a surge in Covid-19 cases in China, the world’s top oil importer, is starting to hit fuel demand, with traffic drifting down and implied oil demand around 13m barrels per day, or 1m bpd lower than average, an ANZ note showed.

China on Friday reported a new daily record for Covid-19 infections, as cities across the country continued to enforce mobility measures and other curbs to control outbreaks.

“This remains a headwind for oil demand that, combined with weakness in the US dollar, is creating a negative backdrop for oil prices,” ANZ said in a separate commodity note.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Large projects again?
Updated 03 Jun, 2024

Large projects again?

Government must focus on debt sustainability by curtailing its spending and mobilising more resources.
Local power
03 Jun, 2024

Local power

A SIGNIFICANT policy paper was recently debated at an HRCP gathering, calling for the constitutional protection of...
Child-friendly courts
03 Jun, 2024

Child-friendly courts

IN a country where the child rights debate has been a belated one, it is heartening to note that a recent Supreme...
Dutch courage
Updated 02 Jun, 2024

Dutch courage

ECP has been supported wholeheartedly in implementing twisted interpretations of democratic process by some willing collaborators in the legislature.
New World cricket
02 Jun, 2024

New World cricket

HAVING finished as semi-finalists and runners-up in the last two editions of the T20 World Cup in familiar ...
Dead on arrival?
02 Jun, 2024

Dead on arrival?

Whatever the motivations for Gaza peace plan, it is difficult to see the scheme succeeding.