- Oil heads for another weekly loss despite an early price spike
- WTI rose by more than 3% this morning to trade near $89
- The USD Index (DXY – a proxy for U.S. Dollar strength against a basket of six international currencies) fell more than 3% this week to the lowest since August
- A weaker dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay less for the same amount of goods
- China announced that it’s planning on easing its Covid restrictions (BBG)
- China announced that it would reduce the quarantine period that travelers and people who have been in close contact with infected people must spend
- The nation also plans to scrap the system that penalizes airlines for bringing new virus cases into the nation
- Lockdowns have hampered China's fuel demand this year, and the pace of reopening will be a key factor in deciding the demand rebound
- Despite the strict Covid strategy, daily cases have climbed to the highest since April
- Many analysts doubt that the nation will reopen rapidly, but if China's Covid-zero policies are broadly relaxed, it would be bullish for crude demand
- In a time when the market is speculating sanctions on Russian supply, a full reopening of China may increase oil demand by about 0.5 MMBbl/d, said Saul Kavonic, an analyst at Credit Suisse Group
- However, concerns that China would continue to impose COVID lockdowns along with bearish U.S. inventory data continues to put pressure on oil prices
- Saudi Arabia’s energy minister Prince Abdulaziz said that OPEC+ would continue to be cautious about oil production and that "it's about being responsible... not losing sight" of what the market requires (BBG)
- The 23-nation coalition, led by Riyadh and Russia, is set to meet on December 4 to determine whether to reduce output once again, keep it stable, or turn around and pump more
- Speaking about China, Prince Abdulaziz stated, "The jury is still out, and the Chinese authorities are saying they are going to continue to be strict and diligent and follow the same regimentation that they have"