- Oil surges to highest in more than three weeks
- WTI rose nearly 4% this morning to trade above $91/Bbl
- Bloomberg reported on Friday that China is planning on potentially easing its Covid restrictions
- According to reports, Beijing is working on a plan to scrap the system that penalizes airlines for bringing new virus cases into the nation
- However, China's COVID-19 cases hit their highest since August on Thursday, and the nation’s National Health Commission reiterated its stance on strict Covid curbs
- It is unknown how long China will maintain its Covid-zero policy; its strict COVID restrictions continue to have an adverse impact on oil demand
- The U.S. and its allies have decided to set a price cap on Russian crude oil at a fixed amount rather than a floating one that moves with benchmark crude prices (BBG)
- It is still unclear at what level the price cap will be set, but coalition officials with knowledge of the matter said it would be a fixed amount and not a discount relative to Brent
- S. officials have expressed a desire to set the crude oil cap above $60/Bbl, which they think would increase the likelihood of convincing Russia to sell at least some of its exports through the program
- Despite being static, the cap will be periodically reviewed and could be amended by the coalition, which is comprised of the G7 nations and Australia
- The group is pushing the cap's implementation in conjunction with the next round of EU sanctions that will go into effect on December 5 — essentially, a restriction on insurance and other services for shipments above a particular price
- Saudi Arabia reduced its oil prices for sales to Asia in December, indicating some concern about the demand outlook (BBG, Reuters))
- State-controlled Saudi Aramco reduced its flagship Arab Light grade by 40 cents to $5.45/Bbl above the regional benchmark for December shipments to Asia, its main market
- Interest rate hikes and weaker-than-expected fuel consumption in China amid its strict COVID-19 have affected the regional demand, according to some traders