Market Analytics and Technical Considerations
Key Points
Following three weeks of loss, both metrics were on course to post their first weekly recoveries.
According to sources cited by Reuters, China is expected to be announced a loosening of its COVID-19 quarantine procedures and a reduction in mass testing in the coming days. This would mark a significant shift in policy in response to widespread protests and public outcry over the strictest restrictions in the world.
A further adjustment to China’s COVID plan, according to IMF managing director Kristalina Georgieva, would be essential to maintaining and stabilizing the economy’s revival.
The U.S. dollar, which normally trades in opposition to oil, however, restrained the price of oil as the dollar crept away from 16-week lows versus a basket of other currencies after statistics revealed that U.S. consumer spending climbed significantly in October.
According to diplomats and a document obtained by Reuters, European Union states have informally consented to a $60 per barrel price ceiling on Russian seaborne oil with just a structural adjustment program to maintain the cap at 5% underneath the market price.
The accord must receive official approval from all EU countries by this Friday.
An EU diplomat said Poland, which had pressed is for cap to be as minimal as possible, has not declared its support for the agreement.
In a statement, BofA Global Research stated that restricting Russian crude pricing would result in consumers paying more for oil on the international market and posed a large higher risk to costs in 2023.
According to BoFa, if Russia ends up producing much less oil, the price of oil might skyrocket. BofA predicted that Russian oil production will reach 10 million barrels per day (bpd) in 2023, but the International Energy Agency forecasts 9.59 million bpd.
